Moody’s ups Tuxpan, view to stable

Moody’s Investors Service said it upgraded the issuer ratings for the municipality of Tuxpan to B1/Baa2.mx from B2/Ba1.mx (global scale, local currency/Mexico national scale.)

Moody’s also upgraded the debt ratings of the municipality’s Ps. 220 million enhanced loan (original face value) with Banorte to Ba2/A2.mx from Ba3/A3.mx.

The upgrade of the issuer ratings to B1/Baa2.mx from B2/Ba1.mx reflects the continuous improvement of Tuxpan’s operating and financial balances which led to a significant increase in Tuxpan’s liquidity position. “The B1/Baa2.mx ratings also reflect ongoing credit challenges including a relatively high debt burden and low own-source revenues collection,” Moody’s said in a press release.

The outlook on the ratings was changed to stable from positive. “The stable outlook of Tuxpan’s B1/Baa2.mx ratings reflects the forecast that the municipality’s debt burden will continue to be elevated compared to other B1 Mexican rated peers. The stable outlook also reflects Moody’s expectation that the municipality will record lower but still positive operating and financial margins considering the expectations of lower federal transfers for the Mexican regional and local governments in 2020 and Tuxpan’s higher dependence on federal transfers as a source of revenue,” said Moody’s.

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