Standard & Poor’s Puts New Mexico On Negative Downgrade Watch Over Fake NMFA Audit
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Reuters is reporting that the credit rating agency Standard & Poor’s has put senior and subordinate-lien debt on Creditwatch with negative implications. The story is linked here. The move comes as the result of revelations that the 2011 audit the New Mexico Finance Authority provided to credit rating agencies and investors was forged. S&P cites concerns with NMFA’s lack of controls that allowed such fraud to occur. The NMFA Board is meeting at the present moment this blog is being posted to determine whether to hire an outside law firm to conduct an investigation and engage an accounting firm for a forensic audit. The move by S&P follows a similar move by Moody’s credit rating agency to review $1.26 billion in NMFA debt.