S&P affirms Tamaulipas

Standard & Poor's said it affirmed its mxAA national scale rating on the State of Tamaulipas, which is part of the United Mexican States (local currency BBB/stable/A-3; foreign currency A/stable/A-1).

The outlook remains stable.

The rating is based on the state's sound and dynamic economic base reflected in a Gross State Product growth rate above the Mexican national average; a solid financial performance, which shows a recovery after the reduction in fiscal balances in 2004; and a low debt burden and improved liquidity position, S&P said.

Factors that offset these credit strengths include the limited revenue flexibility afforded to the state under the Mexican system of local government finance and the need for structural reform of the pension system to guarantee its sustainability over the long term, the agency added.

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