Connect to share and comment
MEXICO CITY (Reuters) - Ratings agency Standard & Poor's will not consider upgrading Mexico's sovereign rating until planned energy reforms pass the Congress, credit analyst Lisa Schineller said on Friday.
Mexican President Enrique Pena Nieto is expected to announce plans to open Mexico's oil, gas and electricity sectors to private investment next week, potentially boosting oil production, lowering energy costs and lifting growth.
But Schineller said S&P, which rates Mexico one notch lower than other major ratings agencies at BBB and has a positive outlook on the country, would not make any premature decisions.
"We need to see passage, not just a strong proposal," she said in a telephone interview, noting that it was also important to assess the combined impact of energy and fiscal reform, which is planned for later in the year.
But if the proposal does not include meaningful constitutional reform, that would suggest that the final version was unlikely to make a significant difference, she added.
Schineller also warned that any major delays or problems in finalizing the energy reforms would bring a "dramatic change in market sentiment," hitting bonds and the currency.
"The market is priced more confidently than we are," she said.
(Reporting by Krista Hughes)