S&P Downgrades Mexico's Sovereign Debt From BBB+ To BBB - Follows Fitch Downgrade Of 11/23

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Standard & Poor’s, the rating agency, on Monday downgraded Mexico on fiscal concerns stemming from the country’s falling oil output and anaemic growth prospects. S&P’s move is the second such blow to the centre-right administration of President Felipe Calderón in three weeks.

On November 23 Fitch Ratings became the first rating agency to downgrade the country in more than a decade, citing increasing fiscal vulnerability as the main reason for its decision.

On Monday’s downgrade now puts Mexico’s credit rating at BBB, down a notch from BBB+. However, the country’s rating is still within the “investment-grade” bracket. In addition, the rating agency placed the country’s outlook on “stable”, which helped to prevent a slide in the Mexican peso.

In a press release S&P expressed its disappointment with next year’s budget. This is a particularly bitter pill for Mr Calderón to swallow, as it comes after attempts by his administration to diversify sources of government revenue were significantly watered down during its passage through Congress.

EDIT

http://www.ft.com/cms/s/0/705b17fa-e90d-11de-a756-00144feab49a.html