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Bond Market News
Mexico Senate Approves Energy Reform Bill to Reclassify Pemex, CFE as Public Companies
October 18, 2024
Pemex’s investors are said to be backing the latest energy reform bill approved by the Mexican Senate, which would reclassify Pemex and Comision Federal de Electricidad (CFE) as “public companies”. The bill would grant the government more control over the energy sector, with some analysts noting that it could lead to Pemex’s bonds trading akin to the sovereign’s notes. Fitch said that it is evaluating Pemex’s credit rating on the bill’s passage, noting that it could lift its rating by as much as four notches i.e., from B+ currently to IG-status. Mexico is currently rated Baa2/BBB/BBB- while Pemex is rated B3/BBB+/B+ by Moody’s, S&P and Fitch. Investors have also noted that the new bill would see the government continue helping Pemex pay down its debt burden that stands at ~$100bn.
Pemex’s dollar bonds were trading steady, with its 6.875% 2026s at 99.6, yielding 7.14%.
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