Moody's downgrades Zapotlan

Moody's de Mexico said it downgraded the issuer rating of the Municipality of Zapotlan el Grande to Baa3.mx on the Mexico National Scale from Baa1.mx.

At the same time, Moody's affirmed the issuer rating of B1 on the Global Scale, local currency.

The outlook remains negative.

"The downgrade reflects a further deterioration in the gross operating balances of the municipality, cash financing deficits and higher debt levels than its national peers," Moody's analyst Roxana Munoz said in a news release.

"Moreover, the negative outlook reflects Moody's view that there is a significant risk that the recent deterioration of key credit factors could continue and reach levels that are no longer consistent with Zapotlan's current B1/Baa3.mx ratings," Munoz added in the release.

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