Moody’s Negative on Merrill Mexico

Moody’s has cut Bank of America Mexico’s global local currency deposit ratings to Baa3/prime-3 from A2/prime-2 and assigned a negative outlook. Moody’s also downgraded Merrill Lynch Mexico’s long term Mexican national scale issuer rating to Aa2.mx (negative) from Aaa.mx and confirmed the short term rating of MX-1. The actions follow last week’s moves on Bank of America Corporation and subsidiaries. “The performance of the Mexican subsidiary and its local franchise and financial metrics continue to position it well within the group of foreign wholesale bank peers operating in Mexico,” says the agency. “It appears that the difficulties faced by its parent bank have thus far had no material effect on the Mexican operations. Nevertheless, Moody’s negative outlook on the bank’s ratings is predicated on potential future pressures on [Bank of America Mexico] as it is so linked to a now weaker US parent. The negative outlook also incorporates the less favorable business and economic environment present in Mexico,” it adds.