And the good news for Veracruz continues. HR Ratings upgrades the rating to HR A- with a stable outlook

Xalapa, Ver.- April 21, 2023.- The rating company HR Ratings revised upwards the rating from HR BBB+ to HR A- and modified the outlook from Positive to Stable for the state of Veracruz and responds to the financial results observed in 2022.

José Luis Lima Franco, Secretary of Finance and Planning of the Veracruz government, was very satisfied with this result because it means that the policies of austerity, financial discipline and containment of public spending, implemented since the beginning of the Cuitláhuac García Jiménez administration, It has borne fruit and today the entity has an A rating by all specialized companies, which makes Veracruz an attractive entity for national and foreign investors.

He explained that it is the sum of several factors, since at the same time that freely available income increased, and investment spending contracted, an increase in the entity’s liquidity was reported, which added to a lower level of short-term financing, translated into a reduction of the Net Debt Adjusted to Unrestricted Income from 72.5% in 2021 to 69.2% in 2022. The Unsecured Debt to Adjusted Direct Debt also decreased from 4.1% in 2021 to 2.3% in 2022 .

“For the next few years, it is expected that a growing trend in unrestricted income will continue and, with this, the entity will report an average surplus level of 2.5% in the primary balance to total income. Likewise, the reduction in the use of short-term debt is expected to continue, with which an average net debt adjusted to unrestricted income of 68.8% is projected from 2023 to 2026, with an adjusted unsecured debt to direct debt ratio of 1.1%”.

Lima Franco explained that the rating agency’s report states that Veracruz “registered in 2022 a surplus in the Primary Balance equivalent to 6.7% of Total Revenues, when at the end of 2021 a surplus of 2.6% was reported, as a result of the increase in Free Disposal Income, derived from a better performance in own collection, as well as an increase in Federal Participations.

In the projected balance sheets, HR Ratings estimates an increase in investment spending for 2023, in line with the expected exercise of liquidity observed at the end of last year. However, it is projected that the positive balance will maintain a surplus level of 2.8% and also an increase in unrestricted income.

The Secretary of Finance of Veracruz predicted that, based on this report, in the coming years, it is expected that investment spending will return to levels observed in previous years and that unrestricted income will maintain a growing dynamic, thus estimates that from 2024 to 2026 the primary balance will be at an average surplus level of 2.4%.