Moody’s Downgrades Tonala

Moody’s has chopped the issuer ratings of the Mexican municipality of Tonala to Baa1 on the local scale and B1 on the global scale. The rating change was prompted by a continued deterioration in financial performance over the last few years, the agency says. This has translated into large borrowing requirements and tighter liquidity levels. “The new ratings also take into account the absence of major contingent liabilities, as well as the municipality’s narrow economic base and large infrastructure needs,” Moody’s adds. The outlook incorporates a low likelihood that the involvement of some municipal officials in a corruption case will directly affect the municipality’s credit.