LatinNews Daily - 17 July 2023

* International credit ratings agency Fitch has downgraded the Long-Term Foreign Currency Issuer Default Rating (IDR) of Mexico’s state-run oil company Pemex from B+ to BB-, citing “continued weak operating performance”. According to Fitch, this performance has led to it lowering several of Pemex’s environmental, social, and governance (ESG) ratings and is expected to further limit Pemex’s sources of financing from banks, investors, and suppliers. Fitch also placed Pemex’s IDR ratings on Rating Watch Negative (RWN), which it states “reflects concern about the Mexican government’s ability and willingness to materially improve the company’s liquidity position and capital structure in the next two years without concessions from creditors”. Fitch noted that Pemex faces international debt bond maturities of US$4.6bn this year and US$10.9bn in 2024, which it says will expose the company to higher interest expense that will further stress its cash flow. It adds that “an inability to refinance the capital markets debt with similar or other long-term financial instruments would exacerbate its liquidity risk by the end of 2024”