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Bond Market News
Pemex Upgraded to B1 by Moody’s
September 9, 2025
Pemex was upgraded by two notched to B1 from B3 by Moody’s. The upgrade follows Mexico’s stronger commitment to support Pemex under the Strategic Plan 2025–2035, which includes equity-like contributions through the $12bn P-CAP structure, partial funding of upstream investments via an investment fund, and a $9.9bn debt tender offer backed by sovereign transfers. While these measures provide short-term relief to Pemex’s liquidity pressures, the company continues to face structural challenges, for instance declining production, refining losses, negative free cash flow, and high annual funding needs (~$7bn in 2026–27). Its liquidity remains weak, with only $5.1bn in cash and limited credit lines as of June 2025, leaving it highly dependent on government support. Moody’s assumptions of “Very High government support” in case of need and “Very High default correlation” between Pemex and the state has resulted in six notches of uplift from the company’s baseline credit assessment (ca). Last month, Fitch had upgraded Pemex to BB on similar rationale.
Pemex’s dollar bonds traded marginally positive, with its 6.625% 2035s currently at 95.49, yielding 7.28%.
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