S&P affirms Baja California Sur

Standard & Poor's said it affirmed the mxBBB+ national scale rating on the State of Baja California Sur, United Mexican States. The outlook is stable.

The agency said the rating on Baja California Sur is supported by a gross state product per capita that exceeds the Mexican national average, an economy that is oriented toward tourism, an improved budgetary performance attributable to strict expenditure controls and efforts to increase modifiable revenue and the absence of unfunded pension liabilities.

The rating is constrained by a relatively high debt level as a percent of discretionary revenue (36.3%); limited financial flexibility, common under the Mexican system of fiscal coordination; the absence of externally audited financial reports and the lack of a formal liquidity policy, exemplified by weak cash levels at year-end, S&P said.

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