Fitch bumps up Pemex’s credit rating to BB+, citing stability

Fitch Ratings has upgraded Mexico’s state-owned lipid institution Petróleos Mexicanos (Pemex) from a standing of BB to BB+, putting the institution conscionable 1 measurement distant from regaining an investment-grade rating.  

The upgrade by 1 of the apical 3 recognition standing agencies came with a unchangeable outlook and followed the palmy completion of a US $9.9 cardinal tender connection successful 8 bid of securities, with financing from the Mexican government. 

“The transaction indicates a stronger transportation betwixt Pemex and the state, which resulted successful an summation successful the company’s Overall Linkage Score (OLS) assessment,” Fitch stated. “Fitch present rates Pemex conscionable 1 notch beneath Mexico’s sovereign rating, alternatively than the 2 notches beneath that led to the upgrade.”  

However, Pemex’s “stand-alone” rating, which assesses the fiscal concern of the lipid institution without authorities support, remained astatine a high-risk standing of CCC.  

“There is an expanding transportation betwixt the sovereign and the firm sector,” Adriana Eraso, manager of corporates for Latin America astatine Fitch Ratings, told the paper El Financiero. “Lending to Pemex is becoming much and much similar lending to the sovereign; determination is simply a committedness to the market.”  

On Sept. 5, Fitch raised Pemex to the affirmative standing of BB, aft the Mexican authorities showed a “greater commitment” to helping the institution conscionable its fiscal obligations done 2027. 

This followed superior injections from the government, including $12 cardinal successful bonds successful July and a $4.4-billion concern money successful August. 

Typically, earning a standing upgrade with a affirmative outlook takes betwixt a twelvemonth and a twelvemonth and a half. However, successful Pemex’s case, the alteration took conscionable 1 month, giving Pemex its highest Fitch standing since 2019. 

Pemex is present expected to proceed with its caller BB+ standing for the foreseeable future. 

Moody’s boosts Pemex’s rating, citing its ‘very high’ authorities support

“To further amended the rating, the scenarios are, first, an summation successful Mexico’s sovereign rating; the 2nd enactment is for Pemex to upgrade its stand-alone standing from CCC to BB-, which would instrumentality a important magnitude of time; oregon finally, for the Mexican authorities to warrant 75% of Pemex’s debt,” explained Eraso.  

Pemex’s expansive plan 

In August, Pemex announced the people of achieving fiscal solvency by 2027, arsenic portion of its 10-year strategical plan. 

The steadfast aims to importantly trim its indebtedness and summation the home accumulation of earthy state to assistance alteration Mexico’s dependence connected the United States for the fuel. 

With reports from El Financiero