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Fitch: Mexico companies view to negative
Fitch Ratings said it revised the outlooks for various Mexican corporations to negative from stable.
The outlook revisions follow a similar revision of Mexico's outlook to negative from stable.
The negative outlook reflects increased downside risks to Mexico's growth outlook and the challenges this could pose for stabilization of public debt burden, Fitch said.
Mexico's growth has been underperforming its peers and the general government debt burden has been increasing steadily in recent years, the agency said.
The companies with revised outlooks include Arca Continental, SAB de CV, Kimberly Clark de Mexico, SAB de CV, Comision Federal de Electricidad (CFE) and Petroleos Mexicanos (Pemex).
The agency also affirmed the companies’ ratings. Arca Continental’s long-term foreign-currency issuer default rating also was affirmed at A. Kimberly Clark de Mexico’s long-term foreign-currency issuer default rating was affirmed at A. CFE’s long-term foreign-currency issuer default rating was affirmed at BBB+ and its long-term local-currency issuer default rating at BBB+. Pemex’s long-term foreign-currency issuer default rating at BBB+ and its long-term local-currency issuer default rating at BBB+.
The negative outlooks consider the deterioration in the economic, trade and financial links of Mexico with the United States that dampen Mexico's investment and growth prospects, Fitch said.
The weak economic growth performance and fiscal deterioration has led to a worsening of government debt dynamics, materialization of contingent liabilities that undermine the sovereign's balance sheet and deterioration in the consistency, flexibility and credibility of the macroeconomic policy framework, the agency said.
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