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Fitch expects the Mexican Government to continue to support Pemex financially. However, the rating agency believes that the state will not outright guarantee the company’s debt. Fitch expects government support to be around $15bn per year. However, should the government substantively increase its support for Pemex resulting in higher deficits and general government debt to GDP/ratio, it could have a negative credit effect on the sovereign. Pemex, whose financial debt surged to $110.5bn as of Q2 this year, received more than $3bn from the government last month to meet its debt obligations.
Pemex bonds traded mixed with its 4.875% 24s at 99.25 cents on the dollar, yielding 6.75%.
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