S&P affirms Hidalgo

Standard & Poor's said it affirmed its mxA- national scale rating on the State of Hidalgo, United Mexican States.

The outlook is stable.

S&P said the ratings on Hidalgo are supported by a historically strong budgetary performance (albeit deteriorating slightly in 2004); sound administrative policies; and a moderate debt level.

The ratings are constrained by a weak economy, characterized by the prevalence of extreme pockets of poverty that limit the state's financial flexibility; modest liquidity levels; and an unfunded pension liability, which is partially mitigated by the transfer of a large number of workers to the Federal Security Pension Institute.

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