Moody's rates La Barca

Moody's Investors Service said it assigned issuer ratings of Baa2.mx and B1 (global scale, local currency) to the Municipality of La Barca.

The ratings are based on the city's weak financial performance, including that of the municipal water system, and growing debt levels, the agency said.

Moody's noted that the ratings also reflect the application of Moody's joint default analysis rating methodology for regional and local governments and include the following inputs: 1) baseline credit assessment of 14 on a-scale of 1 to 21, where 1 represents the lowest credit risk, 2) The credit risk profile of the State of Jalisco, 3) 90% default dependence (degree to which the city and state credit risks are correlated) and 4) 20% probability that the state government would act to prevent a default by the city.

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