DBRS Revises Ratings of Nacional Financiera S.N.C. Following Alignment of Mexico’s Issuer Ratings at BBB (high)

DBRS Limited (DBRS) downgraded the Long-Term Issuer Rating and Long-Term Senior Debt Local Currency rating of Nacional Financiera S.N.C. (Nafin or the Bank) from A (low) to BBB (high) on the Global Scale. The trend remains Stable. All other ratings are unchanged. The Support Assessment (SA) remains at SA1, which reflects DBRS’s expectation of timely support from the federal government of the United Mexican States (Mexico), owing to its ownership and control of Nafin.

The rating actions align Nafin’s ratings with those of the sovereign. On November 28, 2017, DBRS downgraded Mexico’s Long-Term Local Currency – Issuer Rating from A (low) to BBB (high). The alignment of Mexico’s Long-Term Foreign and Local Currency – Issuer Ratings at BBB (high) reflected the application of DBRS’s updated “Rating Sovereign Governments” methodology; it did not reflect a change in DBRS’s view of Mexico’s underlying credit fundamentals (see November 28, 2017, press release, “DBRS Aligns Mexico’s Issuer Ratings at BBB (high) Following Methodology Update”). Given the Bank’s position as an agent of the state for public policy purposes, Nafin’s ratings are equalized with those of Mexico.

RATING DRIVERS
Positive rating pressure would likely be linked to an improvement in the sovereign ratings of the United Mexican States. Conversely, a downgrade of the sovereign ratings would likely have a negative effect on Nafin’s ratings.

Furthermore, any indication of a reduction of support from the Mexican federal government could affect DBRS’s Support Assessment and potentially have a negative impact on the Bank’s ratings.

Notes:
All figures are in Mexican pesos unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (May 2017), which can be found on dbrs.com under Methodologies.

Lead Analyst: Maria-Gabriella Khoury, Vice President, Canadian Financial Institutions Group
Rating Committee Chair: Michael Driscoll, Managing Director, Head of NA FIG, Global Financial Institutions Group

The rated entity or its related entities did initially participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.