Fitch IBCA has bought one of Mexico's top three rating agencies in a further sign of the growing internationalization of credit ratings.
The London- and New York-based rating agency announced this week that it has acquired Mexico's Clasificadora de Riesgos, S.A. de C.V. as part of a plan to expand its coverage of the unsecured debt of Mexican companies and of international securitized transactions.
Fitch added that it has also changed the name of the agency, which was also known as Clase, to Fitch IBCA, Mexico S.A. de C.V.
Credit ratings on foreign institutions and the securities they issue have steadily become more important to U.S. banks. That's because these U.S. institutions have been building a business in arranging underwritings on behalf of foreign banks and selling them to investors.
Charles Prescott, group managing director for Fitch in London, said the decision to expand in Mexico came after an increase in structured financial transactions and a move by Mexico's securities commission to require ratings on local financial institutions and investment funds.
"We believe the structured side of the business will develop in Latin America even if in some countries it is still in its infancy," Mr. Prescott said.
He added that Fitch also expects an increase in demand for international ratings as the Mexican economy picks up.
Clasificadora de Riesgos rates almost 100 industrial companies, financial institutions, leasing companies, managed funds, and servicers in Mexico.
The Mexican agency has been linked to Fitch since 1992 through a technical assistance agreement under which Fitch has helped rate mutual funds, pension funds, mortgage-backed securities, and mortgage servicers, among other institutions.
Fitch and Clase are also cooperating with Mexican government financial agencies, investment bankers, and other financial institutions to develop a secondary market in Mexico for performing and nonperforming mortgages.
Nonperforming mortgages, along with problem commercial loans, have been a massive headache for Mexican banks since a December 1994 financial crisis.
No purchase price was disclosed for the acquisition.
Fitch's Latin American network includes offices and affiliates in Argentina, Brazil, Chile, Peru, and Venezuela. Last month it also opened an office in Uruguay.
