Mexican Outlook Revised Downward

Standard & Poor’s Corp. on Wednesday affirmed Mexico’s foreign currency debt ratings but revised downward the outlook, reflecting concerns that the country faces acute difficulties ahead.

The ratings agency affirmed its BB rating on Mexico’s long-term foreign currency debt, mostly dollar-denominated borrowings from the United States. The highest rating is AAA.

While Mexico’s rating itself reflects the shakiness of the country’s financial stability and weakened ability to meet obligations, S&P didn’t lower the grade, which would have signaled that it believes Mexico’s financial problems have seriously deepened.

The agency said in a statement that the government’s economic austerity program will “provide the basis for a recovery” next year.

But the country is in for a rough ride over the next several months, S&P suggested. It cut the investment outlook for Mexico’s foreign currency debt to negative from stable and lowered the country’s local currency debt rating.