Fitch Ratings changed the outlook on the national long-term rating of the municipality of Santa Catarina from stable to negative, while affirming the rating at 'A-(mex)'.
It is explained that this negative outlook is related to the expectation that the operating balance (BO) will continue to deteriorate and, as a result, affect the debt sustainability metrics projected in the rating scenario, thereby weakening its position compared to other rating companies.
He said that this was related to the performance in the first semester of 2024 which experienced a slowdown in its own revenue, increasing business expenses, and worsening liquidity.
He added that the rating reiteration was based on the stability of the debt sustainability metrics projected in Fitch's rating scenario, which remained at 'aa' and adequate compared to peer entities.
He commented that last year, due to significant revenue growth and increased investment projects, the entity's operating expenses increased significantly, leading to a deterioration in the operating balance, which also put pressure on the liquidity level at the close of the year.