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After Mexican downgrade, S&P cuts 4 government-related financial entities

S&P Global Ratings on Dec. 19 lowered its ratings on four Mexican government-related financial entities, including two development banks, following a similar action on Mexico's sovereign rating.

The rating agency said it dropped the long-term global scale local currency ratings on both Banco Nacional de Comercio Exterior SNC and Nacional Financiera SNC to A- from A. It also lowered the same rating to A- from A for Instituto para la Proteccion al Ahorro Bancario.

For Instituto del Fondo Nacional de la Vivienda para los Trabajadores, better known as Infonavit, S&P dropped the rating to BBB+ from A-.

S&P noted that the rating actions do not indicate a change in the entities' credit quality, but rather reflects the rating agency's recent revision to its methodology for sovereign ratings. Those methodology changes, among other items, reduced the potential mismatch between foreign and local currency ratings to one notch from two notches previously, resulting in the rating agency lowering its long-term local currency rating on the Mexican sovereign to A- from A.

"The rating action on the four [financial entities] reflects the current links and roles with the federal government, and, therefore, their ratings will continue to move in line with those of Mexico," S&P added.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.