AMLO's Tax Breaks Didn't Save Pemex From Another Fitch Downgrade
- Long-term issuer default rating cut two notches to BBB-
- Outlook remains negative, Fitch said in a statement Tuesday
This article is for subscribers only.
Fitch Ratings Inc. has further downgraded Mexico’s indebted oil producer Petroleos Mexicanos to one notch above junk a day after the government proposed cutting $3.5 billion from its taxes. The government’s late Monday announcement failed to include a widely anticipated capital injection.
The downgrade of its long-term issuer default rating two notches to BBB- from BBB+, maintaining its negative outlook, reflects “the continued deterioration of Pemex’s standalone credit profile” and “under-investment in the company’s upstream business,” Fitch said in a statement. Pemex has been technically insolvent since 2009 by having a negative total equity balance, it said.