Moody’s changes Oaxaca view to negative

Moody’s Investors Service said it changed the outlook for the municipality of Oaxaca to negative from stable.

The outlook reflects the expectation that Oaxaca will face significant challenges to improve its revenue collection, given the pandemic’s ongoing economic weakness. If unaddressed, these pressures will lead to material operating shortfalls, resulting in lower liquidity and higher debt levels, Moody’s said.

“As of September 2020, the municipality’s own source revenues collection decreased by 24.6% compared with the same period of 2019, caused by the economic downturn from the Covid-19 pandemic. This level of decrease is one of the highest registered among the municipalities rated by Moody’s, and for 2021, Moody’s expects only a moderate recovery of the own source revenues,” the agency said in a press release.

The agency also affirmed Oaxaca’s B1/Baa3.mx issuer ratings.

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