Circular 39/2020 — Correspondence of Ratings Assigned by Securities Rating Agencies

Monday, October 12, 2020 OFFICIAL GAZETTE
BANK OF MEXICO
CIRCULAR 39/2020, addressed to Credit Institutions, the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, Insurance Institutions, Surety Institutions, Brokerage Houses, Investment Funds, Investment Fund Operating Companies, Investment Fund Share Distributing Companies, Retirement Fund Administrators, Specialized Investment Societies for Retirement Funds, Exchange Houses, Savings and Loan Cooperative Societies, Popular Financial Societies, Community Financial Societies, Multiple-Objective Financial Societies, General Warehouses, Credit Unions, Collective Financing Institutions, Electronic Payment Fund Institutions, Financial Entities acting as trustees in trusts that grant credit, loan or financing to the public, Economic Development Trusts, Development Financial Entities, as well as other persons and trusts with respect to which the Bank exercises regulatory powers, including Credit Information Companies, companies that professionally provide fund transfer services, Clearing Houses and Payment System Administrators, in terms of the respective laws, regarding the correspondence of ratings assigned by securities rating agencies. At the margin a logo, which says: Bank of Mexico.- "2020, Year of Leona Vicario, Meritorious Mother of the Fatherland". CIRCULAR 39/2020 TO CREDIT INSTITUTIONS, THE NATIONAL FINANCIAL INSTITUTION FOR AGRICULTURAL, RURAL, FORESTRY AND FISHERIES DEVELOPMENT, INSURANCE INSTITUTIONS, SURETY INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT FUNDS, OPERATING COMPANIES OF INVESTMENT FUNDS, DISTRIBUTING COMPANIES OF SHARES OF INVESTMENT FUNDS, ADMINISTRATORS OF RETIREMENT FUNDS, SOCIETIES OF SPECIALIZED INVESTMENT FOR RETIREMENT FUNDS, EXCHANGE HOUSES, SAVINGS AND LOAN COOPERATIVE SOCIETIES, POPULAR FINANCIAL SOCIETIES, COMMUNITY FINANCIAL SOCIETIES, MULTIPLE-OBJECTIVE FINANCIAL SOCIETIES, GENERAL WAREHOUSES OF DEPOSIT, CREDIT UNIONS, INSTITUTIONS OF COLLECTIVE FINANCING, INSTITUTIONS OF ELECTRONIC PAYMENT FUNDS, FINANCIAL ENTITIES THAT ACT AS TRUSTEES IN TRUSTS THAT GRANT CREDIT, LOAN OR FINANCING TO THE PUBLIC, TRUSTS OF ECONOMIC DEVELOPMENT, FINANCIAL ENTITIES OF DEVELOPMENT, AS WELL AS OTHER PERSONS AND TRUSTS WITH RESPECT TO WHICH THE BANK EXERCISES REGULATORY POWERS, INCLUDING CREDIT INFORMATION COMPANIES, COMPANIES THAT PROVIDE PROFESSIONALLY THE SERVICE OF FUND TRANSFERS, CLEARING HOUSES AND PAYMENT SYSTEM ADMINISTRATORS, IN TERMS OF THE LAWS RESPECTIVE:
SUBJECT: CORRESPONDENCE OF RATINGS
ASSIGNED BY SECURITIES RATING AGENCIES.
The Bank of Mexico, with the purpose of continuing to promote the sound development and stability of the financial system, in view of the nomenclature used by securities rating agencies in the rating scales they carry out, considers it convenient to establish the correspondence of these scales

OFFICIAL GAZETTE Monday, October 12, 2020 between the ratings applicable to those situations in the general provisions or resolutions of the Bank itself that refer to any specific degree of rating. For the above, based on articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 24 and 26, of the Bank of Mexico Law, 46 Bis 5, fraction II, 48, 54, fractions I and III, 81, paragraph second, and 96 Bis, of the Credit Institutions Law, 176 of the Securities Market Law, 15 of the Investment Funds Law, 48, fraction VI, of the Savings for Retirement Law, 11 Bis 2, fraction XI, and 87-D, paragraph fourth, of the General Law of Organizations and Auxiliary Credit Activities, 132 and 157, of the Insurance and Surety Institutions Law, 22 of the Law for Transparency and Ordering of Financial Services, 4, paragraph first, 8, paragraphs fourth and eighth, 10, paragraph first, 12 Bis, paragraph first, in relation to 20 Quater, fraction IV, 14, paragraph first, in relation to 25, fraction VII, and with 25 Bis, fraction VII, 14 Bis, paragraph first, in relation to 17, fraction I, 14 Bis 1, in relation to 25 Bis 1, fraction IV, with 25 Bis 2, fraction II, and with 25 Bis 3, fraction II, and 19 Bis 1, fraction XI, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Directorate of Payment Systems and Market Infrastructures, the General Directorate of Financial Stability, the General Legal Directorate, the General Directorate of Affairs of the Financial System and the Directorate of Support for Operations, respectively, as well as Second, fractions I, IV, VI, X and XVII, of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, has resolved to issue the following provision:
Sole. The general provisions and other resolutions of the Bank of Mexico that, for the purposes of said provisions or resolutions, refer to any specific degree of rating used by a securities rating agency, it will be understood that it is applicable to those other degrees of rating assigned by other securities rating agencies that are at the same level according to what is indicated in Annexes 1, 2, 3, 4 or 5, of these provisions, as appropriate for long and short-term risk degrees, on the global or local scale, or of investment funds that are applicable.
ANNEX 1
Long-Term Credit Ratings Table on Global Scale Level S&P MOODY’S FITCH HR RATINGS A.M. Best DBRS N1 AAA Aaa AAA HR AAA (G) aaa AAA N2 AA+ Aa1 AA+ HR AA+ (G) aa+ AA (high) N3 AA Aa2 AA HR AA (G) aa AA N4 AA- Aa3 AA- HR AA- (G) aa- AA (low) N5 A+ A1 A+ HR A+ (G) a+ A (high) N6 A A2 A HR A (G) a A N7 A- A3 A- HR A- (G) a- A (low) N8 BBB+ Baa1 BBB+ HR BBB+ (G) bbb+ BBB (high) N9 BBB Baa2 BBB HR BBB (G) bbb BBB N10 BBB- Baa3 BBB- HR BBB- (G) bbb- BBB (low) N11 BB+ Ba1 BB+ HR BB+ (G) bb+ BB (high) N12 BB Ba2 BB HR BB (G) bb BB N13 BB- Ba3 BB- HR BB- (G) bb- BB (low) N14 B+ B1 B+ HR B+ (G) b+ B (high) N15 B B2 B HR B (G) b B N16 B- B3 B- HR B- (G) b- B (low) N17 CCC+ Caa1 CCC+ ccc+ CCC (high) N18 CCC Caa2 CCC ccc CCC N19 CCC- Caa3 CCC- ccc- CCC (low)

Monday, October 12, 2020 OFFICIAL GAZETTE
N20 CC Ca CC
N21 HR C+ (G)
N22 C C HR C (G)
N23 HR C- (G)
N24 Lower Ratings
ANNEX 2
Long-Term Credit Ratings Table on Local Scale
Level S&P MOODY’S FITCH HR RATINGS VERUM A.M. Best DBRS N1mx mxAAA Aaa.mx AAA (mex) HR AAA AAA/M aaa.mx AAA.MX N2mx mxAA+ Aa1.mx AA+ (mex) HR AA+ AA+/M aa+.mx AA.MX (high) N3mx mxAA Aa2.mx AA (mex) HR AA AA/M aa.mx AA.MX N4mx mxAA- Aa3.mx AA- (mex) HR AA- AA-/M aa-.mx AA.MX (low) N5mx mxA+ A1.mx A+ (mex) HR A+ A+/M a+.mx A.N.MX (high) N6mx mxA A2.mx A (mex) HR A A/M a.mx A.N.MX N7mx mxA- A3.mx A- (mex) HR A- A-/M a-.mx A.N.MX (low) N8mx mxBBB+ Baa1.mx BBB+ (mex) HR BBB+ BBB+/M bbb+.mx BBB.N.MX (high) N9mx mxBBB Baa2.mx BBB (mex) HR BBB BBB/M bbb.mx BBB.N.MX N10mx mxBBB- Baa3.mx BBB- (mex) HR BBB- BBB-/M bbb-.mx BBB.N.MX (low) N11mx mxBB+ Ba1.mx BB+ (mex) HR BB+ BB+/M bb+.mx BB.N.MX (high) N12mx mxBB Ba2.mx BB (mex) HR BB BB/M bb.mx BB.N.MX N13mx mxBB- Ba3.mx BB- (mex) HR BB- BB-/M bb-.mx BB.N.MX (low) N14mx mxB+ B1.mx B+ (mex) HR B+ B+/M b+.mx B.N.MX (high) N15mx mxB B2.mx B (mex) HR B B/M b.mx B.N.MX N16mx mxB- B3.mx B- (mex) HR B- B-/M b-.mx B.N.MX (low) N17mx mxCCC+ Caa1.mx CCC+ (mex) ccc+.mx CCC.N.MX (high) N18mx mxCCC Caa2.mx CCC (mex) ccc.mx CCC.N.MX N19mx mxCCC- Caa3.mx CCC- (mex) ccc-.mx CCC.N.MX (low) N20mx mxCC Ca.mx CC (mex) N21mx HR C+ N22mx mxC C.mx C (mex) HR C C/M N23mx HR C- N24mx Lower Ratings
ANNEX 3
Short-Term Credit Ratings Table on Global Scale Level S&P MOODY’S FITCH HR RATINGS AM Best DBRS Ni R-1 (high) A-1+ F1+ HR+1 (G) AMB-1+ P-1 R-1 (medium) A-1 F1 HR1 (G) AMB-1 R-1 (low) Nii R-2 (high) A-2 P-2 F2 HR2 (G) AMB-2 R-2 (medium) R-2 (low)

OFFICIAL GAZETTE Monday, October 12, 2020
Niii A-3 P-3 F3 HR3 (G) AMB-3 R-3
Niv B B HR4 (G) AMB-4 R-4
Nv C NP C HR5 (G) R-5
Nvi Lower Ratings
In cases where for the same securities rating agency more than one rating is included in the same Level, the correspondence will apply to all ratings included in said Level.
ANNEX 4
Short-Term Credit Ratings Table on Local Scale Level S&P MOODY’S FITCH HR RATINGS VERUM DBRS Nimx R-1.N (high) mxA-1+ F1+ (mex) HR+1 1+/M MX-1 R-1.N (medium) mxA-1 F1 (mex) HR1 1/M R-1.N (low) Niimx R-2.N (high) mxA-2 MX-2 F2 (mex) HR2 2/M R-2.N (medium) R-2.N (low) Niiimx mxA-3 MX-3 F3 (mex) HR3 3/M R-3.N Nivmx mxB B (mex) HR4 4/M R-4.N Nvmx mxC MX-4 C (mex) HR5 D/M R-5.N Nvimx Lower Ratings In cases where for the same securities rating agency more than one rating is included in the same Level, the correspondence will apply to all ratings included in said Level.
ANNEX 5
International Investment Fund Management Ratings Table Level S&P MOODY’S FITCH M1 AAAm Aaa-mf AAAmmf M2 AAmf Aa-mf AAmmf M3 Am A-mf Ammf M4 BBBm Baa-mf BBBmmf M5 BBm BBmmf M6 B-mf M7 Bmmf M8 C-mf M9 Dm

Monday, October 12, 2020 OFFICIAL GAZETTE
TRANSITORY
SOLE. The provisions of this Circular will enter into force on the next banking day following its publication in the Official Journal of the Federation. Mexico City, October 2, 2020.- BANK OF MEXICO: The General Director of Payment Systems and Market Infrastructures, Manuel Miguel Ángel Díaz Díaz.- Rubric.- The General Director of Financial Stability, Fabrizio López Gallo Dey.- Rubric.- The General Legal Director, Luis Urrutia Corral.- Rubric.- The General Director of Affairs of the Financial System, José Luis Negrín Muñoz.- Rubric.- The Director of Support for Operations, Joaquín Rodrigo Cano Jauregui Segura Millan.- Rubric. For any queries regarding the content of this Circular, the Bank of Mexico is at your disposal through the Directorate of Authorizations and Sanctions of Central Banking at telephone (55) 5237-2000 extension 3200.