S&P affirms Veracruz

Standard & Poor's said it affirmed its A+(mx) national-scale rating and stable outlook on the State of Veracruz, United Mexican States, based on the full faith and credit of the state.

The rating is based on a historically adequate budgetary performance, albeit deteriorating slightly in 2004, and debt levels that although increasing, still are low compared with national and international standards, the agency said.

According to S&P, factors offsetting these credit strengths include an economy that although diversified, has gross state product per capita that averages slightly above one-half of Mexico's, limited financial flexibility, emphasized by the state's high social and infrastructure needs and the growing burden posed by the state's pension obligations.

S&P added the state's failure to produce financial information on a timely basis is also a credit concern.

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