Introduction to Jalisco’s Credit Rating Upgrade
Guadalajara, Jalisco. PCR Verum, a leading agency for valuation and credit ratings, has upgraded the long-term credit rating of Jalisco state to AAA/M from AA+/M, the highest possible credit quality level for a federal entity.
This announcement follows Fitch Ratings’ decision to grant Jalisco the maximum AAA rating, making it one of only four entities in the country with such high credit recognition from two independent rating agencies.
Reasons for the AAA Rating
According to PCR Verum’s report, Jalisco’s AAA rating is attributed to its positive fiscal performance over the past three years, particularly its primary budget surplus and expectations of continued performance in the short and medium term. This is due to Jalisco’s policies for controlling spending and steady growth in state revenues.
PCR Verum also highlighted that Jalisco’s own revenues grew by 19.2% between June 2024 and June 2025.
Debt Renegotiation
Meanwhile, Jalisco’s direct debt decreased to 28,050 million pesos, a 2.8% reduction from the previous year, as 21 out of 24 loans were renegotiated. This improved financial conditions by an average of 30 basis points, reducing interest costs and smoothing debt maturity profiles.
“Debt service spending is now at 3,600 million pesos. We initiated a very favorable refinancing process that allowed us to lower debt service costs, bringing chapter 9000 to these amounts. With two rating agencies awarding the maximum AAA rating, it’s clear evidence of Jalisco’s sound public finance management,” said Luis García Sotelo, Secretary of Public Finance, in an interview with El Economista.
García Sotelo explained that the debt renegotiation freed up resources for infrastructure investment, approximately 1,000 million pesos per year during the current administration.
Liquidity and Operating Margins
Furthermore, Jalisco’s liquidity reached 24,437 million pesos, doubling the level from the previous year.
PCR Verum praised Jalisco’s solid operating margins since 2022 and anticipates they will remain positive until 2029. The agency also acknowledged Jalisco’s proper management of liabilities and consistent internal savings generation, which strengthen the entity’s fiscal position.
Key Questions and Answers
- What is the significance of Jalisco’s AAA rating? – Jalisco is now one of only four entities in Mexico with the highest credit recognition from two independent rating agencies, PCR Verum and Fitch Ratings.
- What factors contributed to Jalisco’s AAA rating? – Positive fiscal performance, primary budget surplus, controlled spending policies, and steady growth in state revenues.
- How has Jalisco managed its debt? – By renegotiating 21 out of 24 loans, Jalisco improved financial conditions, reducing interest costs and smoothing debt maturity profiles.
- What impact does the AAA rating have on Jalisco’s finances? – The rating demonstrates sound public finance management, freeing resources for infrastructure investment and showcasing solid operating margins and proper liability management.
