Moody’s lowers Oaxaca de Juarez

Moody’s Investors Service said it downgraded the issuer ratings of the municipality of Oaxaca de Juarez to B1 and Baa3.mx from Ba3 and A3.mx.

The outlook remains negative.

The downgrades were prompted by Oaxaca's aggressive debt profile, Moody’s said.

The rating action also considers a deterioration of its operating performance and liquidity metrics, the agency said.

Moody's said it will monitor the company’s debt repayment closely during 2016 and 2017 given that its cash on hand is tight and that a new administration will take power in January of 2017.

There also is no reserve fund for paying debt service and most of debt is not backed by federal transfers, the agency added.

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