Regional Credit Rating Improvement Program

ICMA Latinoamérica helped subnational authorities in Latin America take steps to improve their creditworthiness.


Using a grant from the World Bank through the Public-Private Infrastructure Advisory Facility (PPIAF), ICMA México-Latinoamérica (ICMA-ML) worked with subnational authorities in Latin America to help them improve their credit ratings.

The Regional Credit Rating Improvement (RCRI) program employed ICMA’s CityLinks model to create partnerships between municipal finance practitioners from the United States and their Latin American counterparts. The Latin American partners were selected based on the following criteria:

  • They intended to borrow from banks or bond markets within the next 18 months.
  • Their anticipated borrowing was for infrastructure projects that were expected to help reduce poverty and promote sustainable development.
  • They were committed to financial management reform.
  • They were willing to commit the resources to make improvements in their creditworthiness.

After a pilot phase in Mexico, the World Bank granted ICMA funding to implement a second phase with subnational authorities from Costa Rica and Argentina, which were partnered with U.S. jurisdictions as follows:

  • The municipalities of Esparza and San Carlos, Costa Rica, were partnered with Burlingame, California, and the Genesee County Road Commission in Flint, Michigan (Esparza later experienced financial difficulties that forced it to discontinue its participation).
  • The municipality of Cartago, Costa Rica, and the regional electric utility JASEC were partnered with professionals from El Paso, Texas.
  • The municipality of Mendoza and the province of Salta, Argentina, were partnered with Santa Fe County, New Mexico.

Each partnership involved the following activities:

  • Exchange visits during which the partners learned from each other first-hand and shared knowledge and experience
  • A diagnostic assessment of the financial condition of each Latin American entity and recommendations based on its organizational structure, credit history, and relationship with the rating agencies
  • Facilitation of “shadow” credit ratings as needed to serve as proxy measures where no current rating existed
  • Advice and technical assistance as the entities developed plans to make improvements in their credit ratings.

In addition, ICMA-ML provided ongoing mentoring and technical support from an ICMA staff advisor in Costa Rica to facilitate implementation of the action plans.

During the earlier pilot phase, the RCRI program facilitated the following partnerships:

  • The state of Jalisco was matched with professionals from Phoenix, Arizona.
  • The state of Guerrero was matched with El Paso, Texas.
  • The municipality of Puebla was matched with Burlingame and the Genesee County Road Commission.

Working together, the partners identified the factors that affect the ability to borrow at favorable rates and developed plans to make needed improvements in the factors that are under their control.

During the program, the U.S. practitioner-advisors introduced financial management tools that provided the Mexican partners with the means to improve their operations by bringing greater certainty and clarity to fiscal management. ICMA-ML also planned and delivered two regional workshops focusing on ways to improve creditworthiness.

As a result of the program, each jurisdiction accomplished the following:

  • Established long-term capital improvement plans with projects to be prioritized and updated annually
  • Established multi-year budgets that included revenue forecasts and projections of expenses, including costs associated with operation and maintenance of current and projected capital improvement projects
  • Developed written debt and budget policies that clarify how the organizations deal with debt, budget, and financial issues.

In addition, the municipality of Puebla and the state of Guerrero were able to obtain credit for infrastructure projects based on their sound financial conditions in a year when many Mexican entities had their credit ratings lowered.


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