Moody’s Warns On Possible Mexico Downgrade

Moody’s has just lowered its outlook on Mexico’s credit rating to negative, signalling a downgrade of the country’s debts over the coming year is increasingly likely.

The ratings agency, which currently rates Mexico A3, or four notches above junk, cited subdued growth and the financial woes at state-owned oil company Pemex for the move.

From Moody's

The key drivers of today’s rating action are the following:
1) Subdued economic performance and continued external headwinds will challenge the government’s fiscal consolidation efforts and increase the risk that rising debt ratios will not stabilize over the rating horizon.
2) Contingent liabilities in the form of possible government support to PEMEX, given liquidity pressures at the state-owned oil producer, could further undermine the fiscal consolidation process.

(via FT)