Given the deterioration observed in the balance sheet and liability metrics in 2021, as well as the projections for the coming years for Coacalco de Berriozábal, HR Ratings downgraded the municipality’s rating from “HR BB+” to “HR BB-“. mexiquense and changed the outlook from Negative to Stable.
According to a report sent to the Mexican Stock Exchange, at the end of 2021 there was a deficit in the primary balance (BP) of 9.5% of total income (IT), against 1.1% projected in a previous statement, where it stands out the 8.9% increase in current spending compared to 2020, as well as the 4.9% reduction in federal income.
“With this, current liabilities (PC) represented 59.8% of Free Disposal Income (ILD), compared to 54.5% in 2020. For the 2022-2024 period, an average deficit of 2.0% of IT in the PB, according to greater pressures of current spending and a decrease in the ILD. As a result, the PC is projected to increase to an average level of 75.9% of the ILD between 2022 and 2024, while the net debt (DN) would reach 49.1% of the ILD during the same period (against 41.6% observed in 2021)”, he added.
At the end of 2021, direct debt amounted to 324.5 million pesos, and is made up of a structured loan with Banobras through the FEFOM program and a payment agreement with ISSEMyM. Following the extraordinary level of ILDs at the end of 2021, the DN and SD to ILD metrics were 41.6% and 10.0%, versus 45.2% and 10.5% forecast.
According to the evaluation of environmental, social and governance factors, the latter is considered limited, which negatively affects the rating, since the entity has areas of opportunity related to the availability and breakdown of its financial information, in addition to the fact that presents contingencies related to labor liabilities “of which HR Ratings does not have sufficient information to determine how much the amount could amount to.”
Regarding the environmental factor, this is evaluated as average, since, according to data from the National Atlas of Vulnerability to Climate Change, the municipality has an average vulnerability to landslides and hydrological phenomena.
