Moody's cuts Zapotlan el Grande

Moody's Investors Service said it lowered the issuer ratings of the municipality of Zapotlan el Grande (state of Jalisco) to Baa3.mx (Mexico national scale) and B2 (global scale, local currency) from Baa1.mx and Ba3, respectively.

The outlook is stable.

Moody's said the downgrade reflects Zapotlan's persistently weak fiscal performance, driven mainly by poorly controlled operating costs. The municipality has generated five consecutive financing deficits through 2004, and the cumulative result for the period is a deficit equal to 7.1% of cumulative revenues.

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