He government of Atizapán de Zaragozaheaded by Mayor Pedro Rodríguez Villegasreceived the ‘AAA(mex)vra’ rating of financing, with a stable perspective, by the international rating agency Fitch Ratingsin recognition of its administrative discipline and solid financial situation. This adds to the favorable note from HR Ratings, which also raised the credit rating of the Mexican municipality.
Fitch highlighted the positive scenario for Atizapán de Zaragoza, as well as the significant increase in local income between 2022 and 2023, which also confirms the improvement in its two ratings: that of its financing and that of long-term national credit quality, consolidated in the last three years.
The rating agency highlighted that the rating of a bank loan contracted with the National Bank of Public Works and Services, SNCDevelopment Banking Institution, acquired by previous governments, is based on adequate and stable budgetary results, good liquidity levels in the last three years and the expectation that they will remain stable in the rating scenario.
“We have fulfilled all these obligations on time and that stands out for the rating agencies; Many situations lead municipal governments to default or seek to refinance these debts and this is not the case of Atizapán de Zaragoza (..) The debt of a loan that was initially had of 450 million pesos in previous administrations has been reduced. Currently, we have the balance at 358 million pesos as of June, which is the financial information provided by the rating agency,” indicated the municipal treasurer, José Ortega Ríos.
The credit rating is four steps above the municipality’s risk rating A+(mex), when considering the mix of five key rating factors evaluated: guarantee of irrevocable allocation to a Trust, percentage of the General Participation Fund (FGP); incorporation into the Special Financial Support Program (PEAF) and the State Fund for Municipal Strengthening (FEFOM); as well as the existence of a reserve fund equivalent to 3 times the debt service (payment of interest and capital) for the following month.
“A characteristic of the municipal president, Pedro Rodríguez Villegas, is precisely the issue of discipline and formality. The discipline in terms of budget management has been recognized in the municipality’s own rating, which, in the case of Fitch Ratings, is an A+; HR Ratings, they already rate us with AA; “They see other factors, but in the case of Fitch they observe a lot of budgetary discipline, which is what we consider executing, we execute them with the resources that we allocate for that purpose,” highlighted Ortega Ríos.
In this sense, he said that “there have been no variations, there are no under-exercises, but there are no over-exercises either” and that “one quality that both rating agencies see is the strengthening of own income, we have made progress and we have reduced the dependence that exists or that many other municipalities have from participation and federal contributions,” the official explained.
He added that the dependence on the Municipality has been reduced to almost 50 percent, that is, that practically of every 10 pesos that are generated, Atizapán generates 4.50; Almost half of the income is from its own origin and only 5.50 is from federal origin.
Fitch also highlighted the sustainability of the municipality’s debt, which has adequate capacity to meet its financial obligations.
Another favorable area for this type of international ratings is municipal development and infrastructure, an area in which in the last three years, the government of Pedro Rodríguez invested resources exceeding 2 billion pesos without acquiring debt and without indebting the and the Atizapenses.
From the above, it is concluded that Atizapán is well positioned to finance projects that benefit the community. The active management of the mayor and the treasurer is crucial to ensure sustainable development for the inhabitants of Atizapán de Zaragoza.
In mid-September, the international rating agency HR Ratings raised the credit rating of the municipality of Atizapán de Zaragoza from HR AA- to HR AA and maintained its stable outlook, thanks to the expectation that relative debt will remain at a low level. The rating upgrade was due to the municipality’s solid financial management and efficient debt management.
