Moody’s revises Mexico to stable

Moody's Investors Service said it changed the outlook on Government of Mexico's ratings to stable from negative.

Concurrently, the agency affirmed the country’s foreign currency and local currency issuer ratings, foreign and local currency senior unsecured ratings, and local currency senior secured rating at A3. The foreign currency and local currency senior unsecured medium-term note programs and the foreign currency senior unsecured shelf program were affirmed at provisional A3.

Moody’s said the outlook change was driven by the following factors:

• Risks to growth stemming from the Nafta renegotiation are receding as engagement between members of the treaty has remained solid despite a challenging negotiation process;

• Structural reforms adopted since 2013 have increased the Mexican economy's resilience to shocks, contributing to favorable fiscal results and a moderate decline in public sector debt; and

• Moody's view that the probability is low that the next administration, through a sharp change in policy, weakens economic and fiscal trends.

Mexico's Aaa.mx national scale rating is unaffected by this action. The country ceilings are unchanged. The local-currency country ceilings for bonds and bank deposits remain at Aa3, the long-term foreign-currency bond ceiling remains at A1 and the long-term foreign-currency bank deposit ceiling remains at A3. The short-term foreign-currency bond and deposit ceilings are unchanged at Prime-1 (P-1) and Prime-2 (P-2), respectively.

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