Moody's continues Morelos review

Moody's de Mexico said it is continuing the review for possible downgrade on Morelos' A2.mx Mexican national scale and Ba2 global scale, local currency issuer ratings.

The bank BBVA Bancomer called the early amortization of a Ps. 300 million loan of the Municipality of Cuernavaca due to certain covenant violations by the municipality. The State of Morelos acts as a joint obligor for this loan.

Moody's said it understands that, as of Nov. 14, the bank has not yet fully recovered the outstanding balance and that it is currently in negotiations with the municipality of Cuernavaca.

The review reflects the uncertainty surrounding the state's obligations as a joint obligor under the loan contract in case the bank requires the state for its payment, the agency said.

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