The auction, the first of its kind, was designed to offer foreign banks the chance to swap Mexican debt at a discount for the bonds.

Suppose banks holding 20 percent of the Mexican debt choose to lend new money and the rest choose to reduce either principal or interest.

This made it necessary for another adjustment of the foreign Mexican debt.

The Mexican national debt has reached $1,492 billion.

Thus, investors are loading up on Mexican debt, hoping for big capital gains.

Some $48.9 billion of Mexican debt had been rescheduled under the Baker plan in 1983-84 and 1986-87.

One reason for the risk is that the bonds represent the largest single outstanding portion of Mexican debt.

The move continues a trend among various American companies of converting Mexican debt into entrepreneurial activities.

Mexico also received $15 million cash, plus the assumption of slightly more than $3 million in outstanding Mexican debts.

The term sheet provides a list of options the banks may exercise to reduce the amount of Mexican debt on their books.