Unguaranteed Mexican loans are selling in the secondary market for about 44 cents on the dollar.

The banks are to accept the bonds in exchange for some of their Mexican loans.

Above all, Mexico was aware that some banks were selling their Mexican loans to speculative investors for about half the face value of the loans.

For many banks the agreement will mean accepting a 35 percent reduction in the value of their Mexican loans.

The Mexican bonds would be offered to banks in exchange for Mexican loans they hold.

Most bankers, despite the write-offs they would face, seemed enthusiastic about replacing troublesome Mexican loans with debt backed by Treasury securities.

Last year, the value of Mexican loans rose 32 percent in real terms.

The losses on Mexican loans could also result in substantial tax advantages for many American banks, depending on their earnings and accounting practices.

The Mexican loan may not be completed until early summer.

Some banks, for example, just want to want to get rid of their Mexican loans.