MONTERREY, Mexico & NEW YORK--(BUSINESS WIRE)--Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) and support rating floors of government-related financial institutions, following the recent upgrade of Mexico's sovereign ratings. Ratings have been upgraded for the development banks Nafin, Bancomext, and Banobras, as well as the non-bank entities INFONAVIT and IPAB. Their local currency IDRs were upgraded to 'A-' from 'BBB+', while the foreign currency IDRs and support floors were upgraded to 'BBB+' from 'BBB'. A full list of rating actions follows at the end of this press release.
Rating Drivers
The ratings of Nacional Financiera (Nafin), Banco Nacional de Comercio Exterior (Bancomext) and Banco Nacional de Obras y Servicios Publicos (Banobras) remain aligned with the sovereign ratings, reflecting the high probability that these banks would receive support from Mexico's federal government if required, according to an explicit guarantee stated in their respective organic laws (article 10 in the case of Nafin and Bancomext, article 11 for Banobras).
Infonavit's IDRs are in line with the respective sovereign ratings of Mexico and reflect its systemic importance for the Mexican government on housing-finance policies and social development goals. Although Infonavit is not explicitly guaranteed by the Mexican federal government, Fitch considers that the propensity of the sovereign to provide support is strong, given the high strategic importance of Infonavit. Fitch considers Infonavit to play a key role in financial intermediation, being the largest mortgage lender in Mexico.
IPAB's ratings reflect the sovereign support that the institute would receive from the Mexican federal government, if required, given its key role in the local financial sector and ensuring public confidence in the banking system. Although IPAB's debt does not rely on a specific sovereign guarantee, its organic law states that, if required, the Mexican Congress will establish measures for the payment of guaranteed obligations and financing of supported financial institutions. This law also contemplates a specific item of the Expenditures Decree, that Congress will provide the budgetary resources needed by IPAB to face its corresponding financial obligations. In Fitch's view, sovereign support will continue to be forthcoming.
Rating Sensitivities
The ratings of Nafin, Bancomext and Banobras would reflect any change in Mexico's sovereign ratings, which currently have a Stable Rating Outlook, given that the IDRs of these banks are driven by the explicit support granted by the Mexican federal government in their respective organic laws.
In the foreseeable future, Infonavit's IDRs will likely mirror any positive or negative rating actions taken on Mexico's sovereign ratings. Over the medium-to-long term, as the housing deficit is diminished, the strategic importance of Infonavit to the federal government could gradually change. Although not a baseline scenario, Infonavit's ratings could be driven by its intrinsic financial profile, if Fitch perceives a lower propensity of the government to provide support.
Changes in IPAB's ratings will be driven by changes in Mexico's sovereign ratings, given IPAB's reliance on federal transfers to fulfill its financial obligations is likely to remain for the foreseeable future. Currently, Mexico's sovereign ratings have a Stable Rating Outlook. Also, IPAB's ratings could be negatively affected by changes in its legal framework or a large reduction in the transfers of budgetary resources from the government (one of its main revenue sources), that could alter its financial flexibility.
Fitch has upgraded the following ratings:
Nacional Financiera, SNC:
--Long-term IDR to 'BBB+' from 'BBB';
--Long-term local currency IDR to 'A-' from 'BBB+';
--Support rating floor to 'BBB+' from 'BBB'.
Banco Nacional de Comercio Exterior, SNC:
--Long-term IDR to 'BBB+' from 'BBB';
--Long-term local currency IDR to 'A-' from 'BBB+';
--Support rating floor to 'BBB+' from 'BBB'.
Banco Nacional de Obras y Servicios Publicos, SNC:
--Long-term IDR to 'BBB+' from 'BBB';
--Long-term local currency IDR to 'A-' from 'BBB+';
--Support rating floor to 'BBB+' from 'BBB'.
Instituto del Fondo Nacional de la Vivienda para los Trabajadores (Infonavit):
--Long-term IDR to 'BBB+' from 'BBB';
--Long-term local currency IDR to 'A-' from 'BBB+';
--Support rating floor to 'BBB+' from 'BBB'.
Instituto para la Proteccion al Ahorro Bancario (IPAB):
--Long-term IDR to 'BBB+' from 'BBB';
--Long-term local currency IDR to 'A-' from 'BBB+';
--Support rating floor to 'BBB+' from 'BBB'.
Fitch has affirmed the following ratings:
Nacional Financiera, SNC:
--Short-term IDR at 'F2';
--Short-term local currency IDR at 'F2';
--Support rating at '2';
--Long-term national-scale rating at 'AAA(mex)';
--Short-term national-scale rating at 'F1+ (mex)';
--Local senior unsecured debt issues at 'AAA(mex)'.
Banco Nacional de Comercio Exterior, SNC:
--Short-term IDR at 'F2';
--Short-term local currency IDR at 'F2';
--Support rating at '2';
--Long-term national-scale rating at 'AAA(mex)';
--Short-term national-scale rating at 'F1+ (mex)';
--Local senior unsecured debt issues at 'AAA(mex)'.
Banco Nacional de Obras y Servicios Publicos, SNC:
--Short-term IDR at 'F2';
--Short-term local currency IDR at 'F2';
--Support rating at '2';
--Long-term national-scale rating at 'AAA(mex)';
--Short-term national-scale rating at 'F1+ (mex)';
--Local senior unsecured debt issues at 'AAA(mex)'.
Instituto del Fondo Nacional de la Vivienda para los Trabajadores (Infonavit):
--Short-term IDR at 'F2';
--Short-term local currency IDR at 'F2';
--Support rating at '2';
--Long-term national-scale rating at 'AAA(mex)';
--Short-term national-scale rating at 'F1+ (mex)'.
Instituto para la Proteccion al Ahorro Bancario (IPAB):
--Short-term IDR at 'F2';
--Short-term local currency IDR at 'F2';
--Support rating at '2';
--Long-term national-scale rating at 'AAA(mex)';
--Short-term national-scale rating at 'F1+ (mex)';
--Local senior unsecured debt issues at 'AAA(mex)'.
The Rating Outlook is Stable.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
-- 'Global Financial Institutions Rating Criteria' (Aug 15, 2012);
-- 'National Ratings Criteria' (Jan. 19, 2011).
Applicable Criteria and Related Research
National Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=791023
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