Published On: Thu, Jun 6th, 2019

Double Whammy: Fitch downgrades Mexico and Moody’s lowers outlook

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Fitch Ratings downgraded Mexico’s debt rating to BBB from BBB+ on Wednesday and Moody’s Investors Service changed its outlook to negative from stable amid concerns over state energy company Pemex and as the US was poised to slap tariffs on Mexican exports starting on Monday June 10th.

Rating agencies Fitch Ratings and Moody’s sent warning signals to Mexican authorities on Wednesday June 5th, to reduce the note and the country’s perspective against an environment of uncertainty generated by the tariff hiatus of US President Donald Trump.

The rating agencies foresee a potentially negative economic panorama for Mexico.

Fitch Ratings downgraded Mexico’s rating from ‘BBB +’ to ‘BBB‘ with a stable outlook, while Moody’s changed the country’s outlook from ‘stable‘ to ‘negative‘,  but maintained the A3 rating.

Fitch explained that it degraded the long-term debt issuances in foreign and local currency of the (IDRs) from BBB + to BBB, and revised the outlook to stable from negative against the increased risk to the government’s public finances due to the deterioration of the profile Pemex credit, coupled with continued weakness in the macroeconomic perspective.

As for Moody’s, the change to negative outlook was motivated by the weakening of the policy framework, first because they are less predictable and due to lower economic growth.

San Miguel Times Newsroom



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