Moody’s lowers Coatzacoalcos

Moody's Investors Service said it downgraded the issuer ratings of the municipality of Coatzacoalcos to B1/Baa3.mx from Ba2/A2.mx.

The agency also said the issuer ratings were placed under review for downgrade.

The downgrades reflect the default of Coatzacoalcos on a factoring facility with Santander, along with a significant liquidity deterioration, Moody’s explained.

Moody's said the municipality defaulted on a short-term credit facility of Ps. 20 million with Santander.

While the negotiations with the lender are in progress, the agency said it expects that the outstanding debt, Ps. 15 million to date, will be paid fully in terms yet to be agreed between the parties.

The review will focus on Coatzacoalcos' capacity and willingness to respect all upcoming debt-service payments on all other debt obligations in a full and timely manner, Moody’s said.

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