Pemex Bonds Drop as AMLO Fails to Dispel Fears of Cut to Junk

There’s ‘significant risk’ of rating cut to junk: AB’s Khan
Government stepped back from offering cash injection Monday

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By Justin Villamil and Ben Bartenstein

January 29, 2019 at 5:56 PM UTC

Updated on

January 30, 2019 at 2:42 AM UTC

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Petroleos Mexicanos’s bonds fell amid concern the nation will fail to prevent the world’s most-indebted oil company from losing its investment-grade status. It edged closer to junk after Fitch Ratings lowered its assessment late on Tuesday.

Dollar bonds due in 2027 fell the most in almost three weeks, sending yields up 16 basis points to 7.02 percent on Tuesday. The administration of Andres Manuel Lopez Obrador stepped back from offering fresh funds -- proposing instead $3.5 billion of tax breaks.