Mexico crafts plan to help states reorganize debt

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador attends a news conference at the National Palace in Mexico City, Mexico February 18, 2020. REUTERS/Henry Romero

MEXICO CITY (Reuters) - Mexico’s government said late on Wednesday it had agreed a plan with national development bank Banobras to help restructure some debt among the federal states, which have felt the squeeze from a sharp recession during the coronavirus pandemic.

After a meeting between President Andres Manuel Lopez Obrador and state governors, the Finance Ministry said rules for federal programs from previous administrations linked to state financing contracted with Banobras had been modified.

The rule changes would allow states to carry out refinancing or restructuring of their debt, the ministry said.

Such steps will be determined in agreement with Banobras as sole creditor of the financing, and the measures did not mean any state would fail to meet its obligations, it added.

Writing by Dave Graham; Editing by Alison Williams