Fitch acts on Colombian corporates, Mexican SOEs

Fitch Ratings said it took select rating actions on Colombian corporates following the country's sovereign rating outlook revision to negative from stable and the downgrade of Colombia's long-term local-currency issuer default rating to BBB from BBB+.

The agency took the following actions:

• Ecopetrol SA: Long-term foreign-currency issuer default rating affirmed at BBB, long-term local-currency issuer default rating downgraded to BBB from BBB+, outlook revised to negative from stable;

• Empresas Publicas de Medellin ESP: Long-term foreign-currency issuer default rating affirmed at BBB+, outlook revised to negative from stable; and

• Interconexion Electrica SA ESP: Long-term foreign-currency issuer default rating affirmed at BBB+, outlook revised to negative from stable.

The agency also downgraded the long-term local-currency issuer default rating of the following Mexican state owned enterprises following Mexico's sovereign long-term local-currency issuer default rating downgrade to BBB+ from A-:

• Pemex (Petroleos Mexicanos): Long-term local-currency issuer default rating downgraded to BBB+ from A-, stable outlook, Mexican peso global notes downgraded to BBB+ from A-; and

• Comision Federal de Electricidad SA: Long-term local-currency issuer default rating downgraded to BBB+ from A-, stable outlook, Mexican peso global notes downgraded to BBB+ from A-.

Fitch said the downgrades of the local-currency rating for Ecopetrol, Pemex and Comision Federal de Electricidad reflect the recent downgrade of Colombia’s and Mexico's long-term local-currency issuer default ratings. The credit quality of these sovereign owned entities (SOEs) is linked to those of their sovereigns given their strategic importance for the countries they operate within.

The negative outlooks for Ecopetrol, Empresas Publicas de Medellin and Interconexion Electrica reflects the recent revision of Colombia's outlook to negative. Empresas Publicas de Medellin’s and Interconexion Electrica’s foreign-currency ratings are at the same level as Colombia's country ceiling rating of BBB+ and could be negatively affected by a downgrade of the country's sovereign ratings and country ceiling.

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