Cause for Concern

Cause for Concern

Mexico Bonds Corporate & Sovereign Strategy

by Ivan Castaño Mexico’s short and long-term sub-national debt levels have skyrocketed since the 2009 global recession, triggering several rating downgrades and forcing the federal government to act before the situation deteriorates further. In comparative terms, Mexican state debt levels may not be that high. But the lack of transparency about local government books and banks’ exposure to such entities is a cause for concern at a time when sub-sovereigns are spending more despite limited flexibility in how they can meet their obligations. Tax authorities’ recent discovery that several regions have underreported short-term liabilities served as a wake-up call and encouraged b

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