Fitch Places Pemex’s Credit Rating on Positive Outlook Amid New Federal Support
Credit rating agency Fitch Ratings recently announced it has placed Petróleos Mexicanos’ (Pemex) credit rating on positive watch, following the news of a significant $9.5 billion debt refinancing operation backed by the Mexican government. While Pemex’s current rating remains at ‘B+’, this review reflects a perception of stronger commitment from the Mexican state, which could result in an upgrade if the transaction is successfully completed.
According to Fitch, the potential rating improvement is not due to a recovery in Pemex’s core operations. The company’s baseline credit profile remains at ‘ccc-’, weighed down by high indebtedness, liquidity constraints, and a deteriorated operational structure. However, the new financial backing from the federal administration bolsters expectations that the government will continue to support its state-owned productive enterprise, signaling a stronger and more predictable relationship between Pemex and the Ministry of Finance.
If the refinancing operation is executed successfully, Fitch anticipates adjusting its assessment of the strength of government support from “not sufficiently strong” to “strong.” Under these criteria, Pemex’s rating could be raised by two notches, reaching the ‘BB’ category. Furthermore, recent reforms have allowed for increased financial coordination between Pemex and the Finance Ministry, enabling a shared debt ceiling and greater government oversight of Pemex’s strategic decisions. This could also further improve factors such as “degree of decision-making,” as evaluated by the rating agency.
Nonetheless, Pemex continues to face a delicate financial situation. As of the end of the first quarter of 2025, its total debt stands at $101.5 billion, with interest payments of $2 billion—almost half of its quarterly EBITDA. Fitch estimates that the company’s leverage ratio will remain above 15 times over the review period, reflecting the oil company’s structural challenges despite the temporary relief provided by the refinancing.
Fitch’s analysis also highlights non-financial risks, particularly those related to environmental, social, and governance (ESG) issues. Recurring operational problems—such as fires, leaks, and workplace accidents—have impacted the company’s reputation and public trust. Pemex’s current strategy, focused on maintaining limited production and betting on refining, has been noted as a factor restricting financial flexibility and increasing dependence on state support.
In this context, Fitch’s positive watch represents recognition of the Mexican government’s reinforced commitment, but warns that any rating upgrade would be the result of sovereign backing, not structural recovery at Pemex. The company still faces the challenge of turning political support into a more sustainable financial foundation amid an international environment shaped by the energy transition and increasing demands for sustainability.
In conclusion, expectations for a credit rating upgrade at Pemex rely primarily on the involvement of the Mexican state. While federal backing can provide short-term relief and strengthen perceptions of stability, the oil company’s financial future remains tied to resolving its structural issues and its ability to adapt to the challenges of the global energy sector.
