Moody's may cut Monterrey

Moody's Investors Service said it placed the issuer ratings for the Municipality of Monterrey on review for possible downgrade.

The current ratings are Aa3.mx (Mexico national scale) and Baa3 (global scale, local currency).

Moody's said the action is prompted by the deterioration of the municipality's financial situation, spurred by an increase in spending on personnel.

The municipality has developed a two-year plan for financial recovery. The plan calls for major reductions in operating and capital expenditures, which might prove difficult to implement fully, Moody's said.

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