S&P lowers three Mexico toll roads to negative

S&P said it revised the global-scale outlook on Red de Carreteras de Occidente SAB de CV, Concesionaria Mexiquense SA de CV and Autopista Monterrey-Cadereyta to negative from stable following a similar action on the sovereign ratings of Mexico.

The agency also said it affirmed the global- and national-scale ratings on these entities.

S&P also said it affirmed the national-scale rating on Periferico del Area Metropolitana de Monterrey with a stable outlook.

The outlook revisions follow the outlook revision on Mexico, reflecting a one-in-three chance of a downgrade in the next 24 months if a continued increase in the government's direct debt burden, combined with future potential contingent liabilities, were to result in a worsening debt assessment, the agency explained.

Mexico has undertaken more structural reforms than most emerging market countries, but its growth rate has been disappointing, mostly due to non-economic factors, S&P said.

The administration of President Enrique Pena Nieto made impressive structural reforms to modernize the economy in the first half of its six-year term through cross-party support, the agency said.

But weaknesses in governance, partly reflecting weak rule of law and perceptions of corruption, limit the benefit of these reforms, especially by constraining investment, S&P said.

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