Moody's upgrades Oaxaca

Moody's Investors Service said it upgraded the issuer rating of the state of Oaxaca to A2.mx (Mexican national scale) and Ba2 (global scale, local currency) from A3.mx and Ba3.

The oulook is stable.

Moody's said the rating upgrade is based on the state's satisfactory financial performance that has resulted from a trend of conservative fiscal management and prudent budgetary practices. The upgrade was also prompted by the improvement of Oaxaca's debt profile relative to that of other rated states in the country.

The ratings continue to be constrained, Moody's noted, by Oaxaca's narrow economic base, low socio-economic indicators, as well as by the presence of contingent pension liabilities.

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