Mexico's A3 sovereign credit rating could be downgraded to Baa1 by Moody's if the North American Free Trade Agreement is terminated, the head of the rating agency in Mexico said, according to a report by El Financiero.
Speaking at a financial-sector event Oct. 18, Alberto Jones Tamayo reportedly also said, however, that Mexico would remain an investment grade country with or without NAFTA and no matter who becomes the new Mexican president after next year's elections.
The country's sovereign rating has a negative outlook which Jones Tamayo said was because the country's growth could be temporarily halted if NAFTA is concluded.
"It is not the end if NAFTA is canceled, the worst that could happen is that Moody's would lower Mexico's rating to Baa1, because exports would fall and the Mexican economy would have a contraction. But that rating is still very high and good," the Moody's executive reportedly said.