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 to Sell $1 Billion of 10-Year Bonds Today

Business Week, 1/11/10

Mexico plans to sell $1 billion bonds in the country’s first international offering since its credit rating was cut by Standard & Poor’s and Fitch Ratings.

Mexico may sell the bonds to yield 5.25 percent as soon as today, said a person familiar with the transaction who declined to be identified because terms aren’t set. Citigroup Inc. and Bank of America Corp. are arranging the sale, the government said in a filing with the Securities and Exchange Commission.

Standard & Poor’s lowered Mexico’s rating one level to BBB, the second-lowest investment-grade rating, on Dec. 14, three weeks after Fitch Ratings made the same move, citing a swelling budget deficit. Mexico is the first Latin American country to sell dollar bonds overseas this year as rising investor demand for higher-yielding assets drives down borrowing costs.

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