Last night, after markets closed, Fitch downgraded Pemex to BB+ (with negative outlook) from BBB-, as we predicted.
The agency stated that “the negative outlook reflects the potential for further deterioration of the company's stand-alone credit profile to below CCC” and that, “although Pemex has implemented some cost cutting measures and received moderate tax cuts from Mexico, the company continues to severely under-invest in the upstream business, which could lead to further production and reserves decline”.
Almost in parallel, Moody's changed the outlook on the company’s ratings to negative from stable (in line with its change to the outlook on the sovereign rating), basing it on the “critical importance of the government's financial strength and support to Pemex’s Aa3.mx/Baa3 ratings”...
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