Moody’s Places Pemex Ratings Under Review for Upgrade; Fiscal Support and New Financial Structure Point to Lower Risk
Moody’s Ratings has placed Petróleos Mexicanos (Pemex)’s ratings, including its corporate family rating of B3, under review for a possible upgrade, factoring in the “Strategic Plan 2025-2035” and new support schemes announced by the Government of Mexico (Baa2, negative outlook). The agency expects to conclude its review by the third quarter of 2025, once the financing strategy—which includes $12 billion in capital-like injections under the P-CAP structure and the creation of an Investment Fund to boost upstream projects—is finalized, as well as a plan to address maturities coming due in at least 2026 and 2027.
This decision signals stronger government backing than previously anticipated. Deputy Finance Minister María del Carmen Bonilla announced a third measure to support market liabilities management, aiming to speed up deleveraging. If executed as planned, Moody’s estimates Pemex could receive an upgrade of up to two notches. However, the agency highlights that operational challenges, payment backlogs with suppliers, and financial obligations will continue to put pressure on cash flow in 2026, even with relief from new transactions.
The backdrop is demanding: Pemex carries one of the largest corporate debt loads in the region, faces high accounts payable, and has investment needs to sustain production and maintenance. The company continues to wrestle with costs tied to its refining system—with historically narrow margins—and with bringing new capacity online. Oil production has either stagnated or declined in recent years, and both industrial safety and environmental indicators are putting additional strain on spending. In this context, financial relief may stabilize operations, but it cannot replace the need for structural adjustments.
For the Mexican economy, supporting Pemex is a double-edged sword: it lowers the oil company’s immediate refinancing risks but increases the fiscal burden at a time when public finances are under strain. After a wider deficit in 2024, the 2025 Economic Package faces the challenge of restoring fiscal balance without curbing key public investment. Additionally, energy demand tied to manufacturing relocation is putting pressure on fuel and electricity supply; Pemex’s ability to invest efficiently will affect both costs and the country’s competitiveness. Moody’s cautions that the tight link between the state-owned company and the sovereign means a deterioration in the government’s credit profile could reverse Pemex’s rating gains.
In the markets, the potential upgrade review could compress Pemex bond spreads and, marginally, improve appetite for Mexican risk—pending further clarity. Investors will be watching the design of the Investment Fund—especially its ability to attract private capital with clear rules, strong corporate governance, and performance metrics—the execution of exchange and liability management transactions, and the reduction of overdue payments to suppliers. Any evidence of discipline in capex, improvements in transparency, and stronger operational controls will be key to translating fiscal support into sustainable upgrades to Pemex’s credit profile.
Moody’s will focus its review on the effectiveness of new transactions to strengthen liquidity and capital structure, on confirmation of resources to cover maturities through 2027, and on the design of the new upstream fund. The agency will also assess the post-transaction business profile and projected cash needs. While official backing supports the upgrade thesis, governance and execution risks remain, given Pemex’s close ties to the State and its significant weight in public finances.
In summary, Moody’s upgrade review recognizes a clearer and potentially transformational support framework for Pemex, with positive implications for its debt schedule and liquidity. However, lasting improvement will depend on timely liability management, settling supplier payments, boosting operating profitability, and upholding sovereign fiscal prudence. The balance between state support and internal discipline will be decisive for the final rating.
