Tijuana will increase its credit rating after public debt payment

Tijuana secures itself as a strong municipality capable of facing several financial circumstances

In Tijuana, Baja California, on January 30, 2024, an increase of credit ratings for third year in a row is expected, according to Raymundo Vega Andrade, head of the Municipal Treasury of the 24th Municipal Administration of Tijuana.

This development was made after the government led by mayor Montserrat Caballero Ramírez announced the complete settlement of its million dollar public debt with three financial institutions. The debt with BBVA and Banorte has been settled, while the one with BANOBRAS will be paid soon.

Before the complete payment of this debt, the good management of the healthy finances of the 24th Municipal Administration had already been recognized by credit agencies Standard & Poor's Global Ratings, Fitch Ratings, and HR Ratings, increasing its credit rating from 2021 to 2023.

Regarding S&P Global Ratings, the municipality's rating went from mxA+ to mxAA-, i.e., its payment capacity is considered very strong. Meanwhile, the ratings of already paid credit increased to mxAAA, the highest rating that this agency gives.

Fitch Ratings increased its Tijuana rating to AA(mex), which means "very low risk of default", while the credit ratings were ratified to be AAA(mex), i.e., an exceptional capacity to settle financial commitments, the scale's highest rating.

HR Ratings also increased Tijuana's rating from HR AA- to HR AA, which in this scale means that it is a municipality with a high credit quality.

Regarding its credits, last year HR Ratings rated them with HT AA+, whose scale means that it has "high credit quality and great certainty regarding prompt payments."

Vega Andrade recalled that all entities with public debt are forced to have two positive ratings by certified agencies and, in the case of Tijuana, since the administration took office, three agencies have increased the municipality's rating until it reached the highest scores.

These companies, he said, not only value the financial aspect, but also consider growth and development perspectives, the fulfillment of the Municipal Development Plan, and the macroeconomic aspects that could impact the administration's finances, all of which was rated positively by agencies.

In addition, this consecutive increase since 2021 helped credit interest rates to not increase and now that the debt is paid, Tijuana has positioned itself nationwide and internationally as a solid municipality with healthy finances.

"Increasing this rating to the highest scores demonstrates that Tijuana is a solid city that responds to any demand. The city saves money that it will turn into projects, improvements, security, and a government that can respond to any situation, that can receive a loan almost automatically if an emergency happens," he said.

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