© Reuters. FILE PHOTO: Signage of Petroleos Mexicanos (Pemex) is pictured on the firm’s headquarters in Mexico City, Mexico July 26, 2023. REUTERS/Raquel Cunha
MEXICO CITY (Reuters) – Ratings company Moody’s (NYSE:) on Friday downgraded its rating for Mexico’s state-owned oil firm Pemex by two notches to B3 from B1 beforehand, citing poorer credit score high quality.
Moody’s, which has a unfavorable outlook for the firm, stated it assumed the corporate was receiving excessive authorities assist, and that this assist may very well be jeopardized by a 2024 deterioration of Mexico’s fiscal circumstances.
Pemex is among the many world’s most indebted oil corporations, with monetary liabilities exceeding $100 billion.
The company stated it anticipated a significantly increased fiscal deficit in Mexico on the again of excessive borrowing prices, social spending and emblematic authorities initiatives.
Moody’s stated it expects prices for additional supporting Pemex to have elevated by the time Mexico’s subsequent administration comes into energy in October.
The downgrade comes the identical day Mexico’s authorities ordered the expropriation of a hydrogen plant at a Pemex refinery that had been bought to France’s Air Liquide (OTC:) beneath the earlier administration.