Moody"s affirmed the country"s rating:
- Moody"s decision to affirm Mexico"s sovereign ratings reflects the government"s progress on fiscal consolidation and the significantly reduced likelihood that contingent liabilities from state-owned oil producer, PEMEX, will crystalize given its improved financial performance.
On the negative outlook:
- Moody"s view is that the renegotiation of NAFTA seems increasingly likely lead to only moderate changes to the treaty
- It seems likely that the US administration will pursue only limited changes to the overall agreement, focused mainly on adjusting thresholds for rules of origin and dispute resolution mechanisms, such that the overall effect to Mexico"s economy and its fiscal accounts is contained and credit metrics are not materially affected.
- Nevertheless, it remains possible that more extensive changes, including trade distortions or a withdrawal of the US from the agreement, could be adopted with negative implications for Mexico"s macroeconomic and fiscal performance.
The full report has more detail, these give you the gist. NAFTA negotiations a big risk, of course.
Moody"s affirms Mexico"s A3 issuer rating; negative outlook
Moody"s affirms Mexico"s A3 issuer rating; negative outlook
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