S&P affirms Tlaxcala

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

The outlook remains stable.

The agency said that the rating is supported by low debt levels, ongoing efforts to improve administrative processes, including a history of independent audits to its financial statements and an adequate budgetary performance, with an expected operating balance of 2.7% of operating revenue in 2006.

S&P said that the rating is constrained by a limited economic base, which translate into gross state product per capita significantly below the national average, lack of revenue and expenditure flexibility, reflected in low levels of modifiable revenue and important health infrastructure needs and a rather weak liquidity position due to the structural education deficit.

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