S&P Global Ratings recently lowered the outlook for Mexico's credit rating from stable to negative, and subsequently did the same for state-owned energy companies Pemex and CFE, along with their subsidiaries. The perspective for these entities, currently rated BBB, was reduced to negative, reflecting the sovereign rating's change. S&P warned that this indicates a potential downgrade for both Mexico and its state firms within the next 12 to 24 months if a similar action is taken for the country itself.
The credit rating agency highlighted that the continuous and substantial government support for Pemex and CFE, particularly in times of financial difficulty, is expected to exacerbate Mexico's fiscal rigidity. Between 2019 and 2025, Pemex received approximately $69.8 billion in government support, and the administration of President Claudia Sheinbaum has been implementing various mechanisms to assist the company. Despite this aid, Pemex's individual credit profile (SACP) remains at CCC+, due to its unsustainable capital structure, weak liquidity, and high leverage.
S&P's downgrade of Mexico's sovereign credit outlook was attributed to a combination of factors, including low economic growth, persistently weak fiscal results, the risk of a larger-than-expected increase in public debt, and a growing interest burden. The agency confirmed Mexico's BBB rating, which is two notches above speculative grade. S&P also projects that all Pemex debt amortizations will be financed by federal government transfers, and warned that Pemex's poor operating results could compel the government to provide more funds to cover future financial losses, thereby widening the fiscal deficit. Meanwhile, Mexico has been actively refinancing its debt, freeing up $101.368 million between 2026 and 2029, and authorized a debt ceiling of $1.7 trillion for 2026, partly to support Pemex's debt maturities.
