S&P rates San Luis Potosi

Standard & Poor's assigned its mxBBB national scale rating and stable outlook to the State of San Luis Potosi, United Mexican States.

According to S&P credit analyst Paulina Campos, while the rating reflects San Luis Potosi's state's diversified economy, positive growth prospects and improving debt structure, these credit strengths are offset by the state's poor budgetary performance, insufficient pension reserve, weak liquidity position and debt management and concern over the accuracy of historical financial information.

"The stable outlook reflects S&P's expectation that the recently inaugurated administration is implementing management policies that will allow San Luis Potosi's trend of expenditure growth to stabilize, limiting the need to rely upon external sources of borrowing to fund its substantial infrastructure, operational and debt-service needs," Campos said.

S&P said the state plans to issue a maximum of Ps. 2.8 billion in new debt over the next three years to replace all its existing bank obligations, pay an accumulated debt with the pension institute and finance infrastructure projects.

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