The formation of a new Israeli government will be protracted given that neither the right-leaning Likud party nor the centrist Blue and White Alliance has won enough seats to form a majority government with their traditional coalition partners. This outcome prolongs Israel's political uncertainty and reform inertia and further delays efforts to address the widening budget deficit.

Governance failures can lead to reputational and financial risks, including higher debt financing costs or loss of access to capital markets. Governance risk tends to be issuer- or transaction-specific, while environmental and social risks are more sector-specific.

Mexico’s proposed new budget assumes relatively optimistic GDP growth and oil production. These assumptions result in the budget overestimating next year's government revenue and underestimating the financial support that PEMEX, the state-owned petroleum company, may require.

Our revised aggregate EBITDA forecast calls for no growth this year and flat to about 1% growth in 2020, a fraction of our forecast from earlier this year. A slowing global economy and heightened trade tensions will weigh on an industry critically dependent on trade flow. Several segments within the industry are softening; we expect only aerospace and defense to have solid growth in 2020.