MercoPress. South Atlantic News Agency

Mexico's giant Pemex, remains world's most indebted oil company

S&P in March slashed the credit rating for Pemex, the world’s most indebted oil company, to B- from BB-.

A Mexican government energy policy that gives more weight to state oil company Pemex could cause private sector investment to fall, an analyst with credit ratings agency Standard & Poor’s said on Friday.

Lisa Schineller, S&P’s head of Latin American sovereign ratings, said at an event in Mexico City that the government’s prudent fiscal policy positions have already been incorporated into its sovereign credit rating for the country.

The agency is unlikely, however, to modify its Pemex credit rating, at least in the near term.

Luis Manuel Martinez, S&P’s lead analyst covering the Mexican national oil company, said he does not expect any further Pemex downgrade over the next few months.

“We have not identified a single factor that makes us think that we should change this evaluation in the short term,” said Martinez.

S&P in March slashed the credit rating for Pemex, the world’s most indebted oil company, to B- from BB-. It also cut Pemex’s outlook to negative from stable while keeping its global investment grade rating at BBB+.

In June, Fitch Ratings cut the credit rating of Pemex from investment grade to speculative grade, or “junk,” with a negative outlook.
A second downgrade to junk from another major rating agency would likely trigger billions of dollars in forced selling of the company’s bonds from funds whose mandates prohibit holding such assets.