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Pemex Upgraded by Two Notches on $12bn P-Cap Transaction
August 4, 2025
Pemex was upgraded to BB from B+ with a stable outlook by Fitch. This follows the successful completion of Mexico’s $12bn pre-capitalised (P-Cap) 5Y bond issuance. Proceeds from the P-Caps issuance will be used to buy a portfolio of US Treasuries and/or STRIPS. Pemex will then take that portfolio and use it as collateral for loans through the repurchase market, using the proceeds as it deems fit. Mexico has also taken legislative actions that allows Pemex to share a debt ceiling with the Secretary of Finance. The upgrade reflects Fitch’s view of stronger federal support and government oversight.
However, Fitch has also addressed possible challenges that Pemex would face to maintain its current rating. Fitch believes that the multi-year underinvestment in both the upstream and downstream assets will continue eroding operational performance. Production & Development of new fields have declined in the last few years, making it a top risk, they added. Fitch also reiterated ongoing ESG concerns. Pemex reported total cash and equivalents of ~MXN 96.4bn ($5.1bn) as of June 2025 and reported MXN 1.9tn ($100.8bn) of total debt with MXN 529bn ($28bn) in short-term debt.
Pemex’s dollar bonds are trading stable, with its 5.35% 2028s currently at 97.55, yielding 6.42%.
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