Mexico upgrade could only come after reforms approved, reviewed: S&P

increase bar chartReuters, 5/23/2013

Standard & Poor’s could decide to boost Mexico’s debt rating only if the government approves a raft of ambitious reforms and the measures are effective, credit analyst Joydeep Mukherji said on Thursday. Mexico’s major parties signed a pact last year to push long-sought measures through the country’s divided Congress, including reforms to boost the country’s paltry tax take and raise production at ailing state-owned oil monopoly Pemex PEMX.UL.

Earlier this month, Fitch Ratings upgraded Mexico’s sovereign foreign currency credit rating by one notch to BBB-plus, pointing to the country’s solid economic foundations and welcome progress on reforms. But S&P’s Mukherji said his agency would only consider an upgrade after the reforms were approved and could be evaluated for their impact.

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Mexico’s Debt is Downgraded to Just Above ‘Junk

Los Angeles Times, 12/14/09

Mexico’s credit rating took another hit Monday, edging closer to “junk” status, on worries about the country’s growing budget deficit and dwindling oil revenue.

But stock and currency investors continue to give Mexico the benefit of the doubt in the short run. Some may well wonder why the country deserves a lower debt rating than Greece, given the latter’s far more desperate budget situation.

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Mexico needs “urgent” tax reform plan

Reuters, 5/18/2009

Mexico needs to quickly come up with a plan to tackle its growing fiscal problems, central bank Governor Guillermo Ortiz said on Monday, as Mexico struggles with a low tax take and sliding oil revenues.

Standard & Poor’s placed Mexico’s credit rating on review last week with an eye to a possible downgrade, citing the country’s heavy reliance on oil sales and doubts over the political will of the government to boost non-oil tax revenues despite sliding crude output.

“It is really urgent that once we are through the elections that a medium-term fiscal program be designed and passed,” central bank Governor Guillermo Ortiz said, referring to mid-term congressional elections in early July.

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Mexico rating under pressure, S&P signals downgrade

Reuters, 5/12/2009

Pressure over Mexico’s sovereign ratings increased on Monday as Standard & Poor’s signaled a possible downgrade later this year and a Moody’s analyst said his agency could also act soon if the country is unable to contain growing fiscal problems.

S&P revised to negative from stable the outlook on Mexico’s BBB-plus sovereign credit ratings. The agency warned it may downgrade them this year if the government fails to reduce its heavy reliance on oil revenues, which have been declining fast as a result of a global recession.

In an interview with Reuters, S&P analyst Lisa Schineller said the Mexican administration has signaled its intent to add some “fiscal enhancing measures” to the country’s 2010 budget.

“But it is not clear how deep those measures will be, how permanent they will be and also not clear how the political appetite will be” for approving the measures, she said.

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