This Monday Moody’s downgraded the rating Petroleos Mexicanos (Pemex) to B1 from Ba3, with a stable outlook.
The agency itself explained that this downward action was caused by last Friday’s announcement, in which downgraded the ratings of the Government of Mexico to Baa2 from Baa1 with a change in outlook to ‘stable’ from ‘negative’.
“The downgrade of Pemex’s ratings to B1 was motivated by the downgrade of Mexico’s rating, given the critical importance of the financial strength of the government and the support in evaluating the credit profile of the oil company due to its high liquidity risk. ”, Moody’s emphasized.
He explained that the action also considered Pemex’s high debt maturities in 2022-2024 and expectations of continued negative free cash flow, as well as the need for large amounts of external financing given persistent losses in the company’s refining business.
The action also took into account that Pemex’s access to capital markets is currently limited due to its high intrinsic credit risk.
With this the note of the oil company sinks another rung in the speculative field by Moody’s.
Fitch Ratings also has the firm out of investment grade, with a rating of BB- with a “stable” outlook.
On the contrary, S&P maintains Pemex in the low investment grade range, at BBB with a “stable” outlook.