S&P affirms Veracruz

Standard & Poor's said it affirmed its mxA+ national-scale rating and stable outlook on the State of Veracruz, United Mexican States.

The outlook remains stable.

The agency said that the rating reflects the following credit strengths: a positive trend in budgetary performance that may be somewhat affected in 2007, sound managerial practices that have contributed to the recovery of Veracruz' financial performance and the absence of direct debt, although there is still a significant amount of tax-supported debt.

Factors that offset these strengths include that although one of Mexico's largest economies, Veracruz is still the fourth least developed and has one of the lowest GDPs per capita, limited financial flexibility, common under the National System of Fiscal Coordination and the need for a thorough pension reform, S&P said.

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