On Aug. 22, 2006, Standard&Poor's Ratings Services assigned its 'A' long-term local currency rating to five Bonos de Desarrollo (Bondes D) recently issued by the United Mexican States (BBB/Stable/A-3 foreign, A/Stable/A-1 local currency sovereign credit ratings). The bonds, issued on Aug. 10, 2006, raised a total of Mexican peso (MxP) 135.051 billion. The ratings on the United Mexican States reflect: Growing macroeconomic stability; An improving debt profile; and Improving external liquidity. The ratings are constrained by: The lack of political consensus on policies to boost GDP growth and to strengthen the government's tax base; The government's narrow nonoil tax base, around 11% of GDP, and resulting fiscal inflexibility; and A weak institutional framework that constrains GDP growth prospects.
