Moody's downgrades Nayarit

Moody's Investors Service said it downgraded the issuer ratings for the state of Nayarit to B3 (global scale, local currency) and B1.mx (Mexico national scale) from B1/Baa3.mx, downgraded its senior secured debt ratings to Baa3/Aa3.mx from Baa1/Aa1.mx, and placed the ratings under review for further downgrade. The outlook was negative.

The downgraded debt ratings to Baa3/Aa3.mx apply to the following three enhanced loans Ps. 5 billion (original face value) enhanced loan from Banobras, Ps. 500 million (original face value) enhanced loan from BBVA Bancomer and Ps. 247 million (original face value) enhanced loan from Santander.

“The downgrade and placement of the ratings under review for further downgrade reflect a significant deterioration in Nayarit's liquidity position and considerable financial pressure stemming from its weak operating performance and ongoing revenue pressures that will likely continue through at least 2021. Nayarit has recently fallen behind on debt service payments on its short-term bank loans as it faces declining operating revenues and recurring spending pressures, highlighting the state's weak governance and planning practices,” Moody’s said in a press release.

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