In This Issue: Mexico: Taking Stock Of Change: The narrow margin of Felipe Calderon's victory, and the political challenges he will continue to face from his closest electoral opponent, could make it difficult for the new Administration to implement its policy agenda. However, the uncertainty on the political front is balanced by Mexico's good economic performance in 2006 and its track record of macroeconomic stability, providing a favorable context for a political transition.Is The Mexican Banking Sector Positioned For Continued Growth?: Following the outcome of the Mexican presidential elections, where Felipe Calderon was declared the winner, the Mexican financial system is expected to continue its strong performance trend based on economic stability, healthy loan portfolios, and good capitalization levels. How Will Mexico's Presidential Election Affect Mexican Corporates?: As macroeconomic conditions are stronger today, Standard & Poor's does not expect the high inflation and volatile interest rate and currency devaluation dynamics that occurred in the past and that severely affected many parts of the economy. The different industrial sectors have taken advantage of the development of local capital and debt markets as alternative sources of finance for their projects. Structured Finance In Mexico Looks Beyond Elections And Toward Sustained Growth: Mexico has become fertile ground for the growth of domestic, local currency securitizations, issuing US$2.9 billion thus far in 2006, a 72% increase over the same period last year. Total issuance this year is expected to exceed US$4 billion. Mexican States And Municipalities Immune To A Change In Presidential Administration: Standard & Poor's expects no significant changes to its ratings on Mexican states and municipalities. Most entities have stable outlooks and their ratings are supported by adequate budgetary performances and relatively low debt levels. Mexican States: The Road To An Upgrade: Standard & Poor's assigned its first Mexican state rating in 1999. Today, it rates 27 of the 31 United Mexican States, and the overall evolution has been positive. There have been 20 upgrades and only one downgrade over the last eight years. In fact, almost 60% of the ratings are in the 'mxA' category. | 
