Fitch Special Report: Fitch-Rated Mexican States: Medians of Key Indicators

Thu Apr 4, 2013 4:56pm EDT

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MONTERREY, Mexico--(Business Wire)--
Fitch Ratings publishes its Special Report 'Group of Mexican States Rated by
Fitch: Medians of Key Indicators (2013).' This report briefly presents the
performance of the main variables to be considered in the credit risk analysis
process of the Mexican states. In order to provide transparency to the financial
community, Fitch calculates the median of 22 variables regarding revenue,
expenditure, capital expenditure, financial flexibility, indebtedness,
sustainability, and other nonbanking or current liabilities. 

The report shows that the state revenue to total revenue ratio of the group of
Mexican states rated by Fitch (MSF) increased, mainly due to the incorporation
of highly subsidized revenues, so they did not necessarily improve the financial
flexibility of the entities. Likewise, with the exception of the entities rated
'AA(mex)', the rest of the MSF registered an additional reduction in free cash
flow from operations (FCFO), a decline in capital expenditure and a weaker
liquidity position, due to an increase in short-term liabilities. 

The long-term debt relative to the ordinary fiscal revenues (current revenues)
of the MSF continued to increase, but it remains at moderate levels for the
entities rated 'A(mex)' and 'AA(mex)'. Also, debt service as a portion of FCFO
remains at sustainable levels in such entities. Regardless, the majority of the
states can still access funding in a prudent manner and maintain their leverage
indicators at manageable levels. The financial flexibility of the states with
high leverage levels, however, is being pressured by the greater resources
destined for debt service. 

Additional information is available at www.fitchratings.com. 

Applicable Criteria and Related Research Group of Mexican States Rated by Fitch:
Medians of Key Indicators (2013)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=704407

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF
CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE
SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS
SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED
ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH
WEBSITE.

Fitch Ratings
Gerardo E. Carrillo Aguado, +52 55 5202 1770
Fitch Mexico S.A. de C.V.
Blvd. Manuel Avila Camacho No. 88, Edificio Picasso, Mexico D.F.
or
Humberto Panti, +52 81 8399 9100
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1 212-908 0526
elizabeth.fogerty@fitchratings.com

Copyright Business Wire 2013

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