The Weston Group LLC (Weston) began its investment banking and capital markets trading business in 1989 with the specific intention of investing in distressed Mexican and Argentine corporate credits, claims, litigations and restructurings that were holdovers from the 1982 Latin American debt crisis and government bond defaults.
Weston focused on acquiring Mexican corporate bond and loan obligations that exceeded USD 14 billion in original debt default. Successfully acquiring over USD 600 million of distressed Mexican corporate debt in a partnership with a Mexican proprietary trading firm and several wealthy backers in 1989 and 1990, the USD 600 million of corporate debt instruments acquired by the Weston partnership was converted into either equity or cash over 18 months by using litigation techniques previously unknown to the Latin American corporate world.
As a result, over USD 90 million of gross profits were generated by the partnership in two years as Latin America emerged from a decade of bankruptcy.
In 1991, Weston went on to become the first investment banking firm on Wall Street to structure and underwrite a private sector corporate bond for a Mexican corporation post the 1982 Latin American Sovereign Debt default in a partnership with Deutsche Morgan Grenfell, London (now Deutsche Bank AG). Weston’s brokerage and trading prowess vaulted it into a position of being Wall Street’s largest trader of Mexican debt securities denominated in USD and Mexican Pesos from 1991 to 1995.
Weston managed over USD18 billion of Mexican debt securities for some of the largest mutual funds and hedge funds in the world. In 1991, Weston also created the first mortgage backed security in Latin America for a Mexican company known as Grupo Sidek S.A.
Weston clients who owned over USD 18 billion of Mexican government debt securities were harmed by a Mexican Ministry of Finance decision to artificially devalue the Mexican Peso in late February 1994. As a result, Weston clients allowed us to challenge the wisdom of a governmental intervention in the free currency markets where we launched a public objection to the intervention which became known as The Weston Forum. History proved that with no change in the Mexican government’s foreign exchange policy forthcoming, Weston had no choice but to recommend to its 7 largest clients to liquidate all positions in Mexican debt.
Weston executed a series of large scale liquidations of Mexican peso debt securities and forced Mexican Treasury auctions to be cancelled in March and April of 1994 while driving MXP Treasury Bill interest rates from 6% to 30% in a matter of weeks. Weston continued negotiating with the Mexican Ministry of Finance and Central Bank but to no avail. By June 1994, Weston had successfully executed the sale of over USD14 billion of Mexican Government debt securities for its clients. The Mexican Government defaulted on USD37.5 billion of debt in December 1994 and the Mexican Peso devalued over 3000%. The Mexican Government debt default and devaluation were attributed to Weston in several stories written by the U.S. and Mexican press.
Weston migrated to the distressed debt, litigation claim and private equity space in 1995 and has remained there for over 27 years.