S&P: Nuevo Leon to positive

S&P said it revised the outlook on the state of Nuevo Leon to positive from stable.

The agency also said it affirmed the state's mxA- national scale issuer credit rating.

The state's improving budgetary performance and liquidity could strengthen the rating, the agency said.

S&P said it expects the state to maintain a generally balanced budget in 2017 through 2019 with operating surpluses averaging at higher than 5% of operating revenue and minor deficits after capital expenditure.

This forecast is based on an estimated growth of federal tax participations of about 6% and expenditure controls, which could help compensate for the gradual elimination of the vehicle ownership tax until 2019, the agency said.

S&P also said it expects the state's budgetary performance to be less volatile than in previous years.

Nuevo Leon's 2016 budgetary performance was the strongest in the past five years due to primarily a 16% increase in federal tax participations and a 3% cut in the state's operating expenditures, the agency said.

Despite progress, challenges remain for the current administration with the difficult political landscape, S&P said.

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