Moody’s Upgrades Rating on Mexico’s Debt

Credit rating agency Moody’s upgraded Mexico’s long-term foreign currency debt to Ba1, which places it one notch below investment grade. The agency upgraded Mexico’s long-term foreign currency country ceiling for bonds and notes to Ba1 from Ba2 and posted a positive outlook. The move is important because it means the country can borrow more cheaply on the international market and can also ease the interest burden of Mexican corporations that issue debt abroad. In announcing the move, Moody’s praised a number of Mexico’s efforts, including an increase in exports, prudent fiscal and monetary policies that have translated into a lower foreign currency debt burden, and a floating exchange rate that has lightened the burden on Mexico’s international reserves. The agency also applauded a multibillion-dollar financial package, including a $4.2-billion standby agreement with the International Monetary Fund set up as a precautionary move ahead of next year’s presidential elections.