S&P drops Michoacan

Standard & Poor's said it lowered its national scale rating on the State of Michoacan to mxA from mxA+ and removed the rating from CreditWatch with negative implications, where it was placed on Oct. 17.

The outlook is stable.

The agency said that the downgrade reflects aggressive debt issuance by Michoacan, which can issue up to Ps. 5.5 billion.

Thus far, the state has issued debt for Ps. 3.5 billion, equivalent to 56% of 2008 budgeted discretionary revenue and is expected to issue the remaining Ps. 2 billion during the next few years, the agency noted.

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