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Traders Skeptical Mexico Can Avoid Downgrade As Debt Surges

  • S&P and Fitch have negative outlooks on Mexico’s ratings
  • Country’s debt-to-GDP ratio has soared to a 20-yr high of 55%
Updated on

Traders are growing increasingly pessimistic about Mexico’s ability to stave off a credit-rating downgrade.

It costs 0.23 percentage point more to insure Mexico’s bonds against nonpayment than debt from lower-rated Panama, based on trading in credit-default swaps. That’s the most in six years. Mexico is also more costly to protect against default than Peru, which shares the same A3 rating from Moody’s Investors Service, four levels above junk, and the BBB+ from S&P Global Ratings and Fitch Ratings.