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Moody's acts on Mexican financial institutions following change in sovereign outlook

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Moody's acts on Mexican financial institutions following change in sovereign outlook

Moody's de México said April 4 that it took various ratings actionson Mexican financial institutions following the change of the outlook of Mexico'sA3 government bond rating to negative.

The rating agency placed on review for downgrade the long-termglobal local and foreign currency deposit ratings as well as the long- and short-termcounterparty risk assessments assigned to eight Mexican banks. This includes theA3 and A2(cr)/Prime-1(cr) ratings on BBVABancomer SA, Banco Nacionalde México SA, Banco Santander(México) SA and BancoMercantil del Norte SA. It also includes the A2/A3 and A1(cr) ratingson HSBC México SA Institución de BancaMúltiple Grupo Financiero HSBC, the A3 and A3(cr) ratings on , and the Ba1and Baaa3(cr)/Prime-3(cr) ratings on both BancoAzteca SA Institución de Banca Múltiple and Banco Interacciones SA.

Among those banks, the senior unsecured debt ratings of the eightof them, the stand-alone baseline credit assessments of seven — all but Banco Nacionalde México — and the subordinated debt ratings of three — BBVA Bancomer, Banco Mercantilde Norte and HSBC México — were also lowered. At the same time, Moody's placed onreview the ratings of seven bank financial affiliates, including , HipotecariaNacional SA de CV, Santander ViviendaSA de CV Sociedad Financiera de Objeto Múltiple ER, , ,Scotia Inverlat Casa de Bolsa SA deCV and HSBC Casa de BolsaSA de CV.

Moody's also placed on review for downgrade the banks and affiliates'long-term Mexican national scale deposit, issuer and senior and subordinated debtratings.

In addition, Moody's changed to negative the outlook on the A3global local and foreign currency issuer and debt ratings of Instituto para la Protecciónal Ahorro Bancario and three government development banks — Nacional Financiera SNC, Banco Nacional de Comercio Exterior SNC and .The rating agency also placed on review for downgrade Banco Nacional de Obras yServicios Publicos's "ba1" and Banco Nacional de Comercio Exterior's "ba2"baseline credit assessments.

Finally, Moody's revised Mexico's macro profile to Moderate +from Strong -, the impact of which will be considered on bank's financial profilesin addition to the likelihood of banks' benefit from government support.

The change in the macro profile reflects Mexico's weaker economicprospects and the increased risks this represents for its banks, Moody's said.