S&P Global Ratings revised its outlook for Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE) from stable to negative.
This decision aligns with the same rating action for Mexico issued a day earlier by the same company, which highlighted slow economic growth, budget constraints, and a moderate increase in public debt.
“On May 13, 2026, we revised our rating outlook from stable to negative for the state-owned oil company Petróleos Mexicanos and its subsidiaries (PMI Trading DAC, PMI Norteamérica S.A. de C.V., Mex Gas Supply S.L., and Deer Park Refining L.P.), as well as for the Federal Electricity Commission (CFE), its subsidiary CFE International LLC, and CFE Fibra E,” S&P detailed in a statement.
“We have revised our rating outlook for the state-owned companies Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE) to negative, consistent with the same rating action for Mexico. The negative outlook for Mexico reflects the risk of very slow fiscal consolidation, primarily due to weak economic growth, resulting in a larger-than-expected increase in public debt and a higher interest burden,” it added.
The expected substantial and continued fiscal support for Pemex and CFE could further exacerbate Mexico’s fiscal rigidity, the firm warned. An unexpected deterioration in Mexico’s close trade relations and other economic ties with the United States could also weaken the country’s current strong external position, S&P stated.
“Our ratings on Pemex continue to reflect our expectation of a near certainty of government support in a scenario of financial difficulties. This likelihood of support is based on our view of Pemex’s integral link with the government and its fundamental role in economic, social, and political objectives; our expectation that the government will continue to participate in Pemex’s board discussions; and our view that Pemex will continue to execute its financing strategy in close coordination with the Ministry of Finance and Public Credit,” S&P explained.
S&P highlighted that Pemex received approximately $69.8 billion in government support between 2019 and 2025, and that the government of Claudia Sheinbaum has been implementing various mechanisms to assist the company.
“However, Pemex’s individual credit profile remains at ‘ccc+’, reflecting our conviction that its capital structure is unsustainable, given its weak liquidity and high leverage. Pemex had a debt-to-EBITDA ratio of 5.8x and recorded negative operating free cash flow in the first quarter of 2026.
“Furthermore, we revised the rating outlooks of Pemex’s subsidiaries: P.M.I. Trading DAC (BBB/Negative/–), PMI Norteamerica S.A. de C.V. (BBB/Negative/–), and Mex Gas Supply S.L. (BBB/Negative/–) from stable to negative, as we consider them fundamental to Pemex and its consolidated operations.
“We also revised the outlook for Deer Park Refining L.P. (BBB-/Negative/A-3) from stable to negative to reflect that it remains a highly strategic subsidiary for Pemex, vital to sales of refined products and international trade,” the firm explained.
The ratings for CFE also reflect its expectation of a near-certain probability of government support in a scenario of financial difficulties, it added in its statement.
“In our opinion, CFE continues to play a fundamental role in the Mexican government’s public policies: it provides a key service as the only company legally authorized to transmit and distribute electricity in Mexico and owns strategic assets for the national electricity grid.
“Furthermore, CFE is the only company that supplies electricity to low-consumption residential users and is the main provider for high-consumption users.” “We expect the company to remain a leading player in the country’s power generation industry,” he commented.
S&P believes that CFE and the Mexican government share an integral link, given that the sovereign is the sole owner of CFE and anticipates that the government will maintain control of the company, appoint its senior management, and drive its strategic and financial policies. “Therefore, we have aligned CFE’s rating with that of the sovereign,” he stated.
The outlook for CFE International LLC (CFEi; BBB/Negative/–) was also revised to negative, as it is considered a key subsidiary of CFE.
“We continue to view CFEi’s operations as fully integrated within CFE. CFEi is focused on ensuring that Mexico, and specifically CFE, has a sufficient supply of natural gas for power generation. Consequently, our rating for CFEi remains aligned with that of its parent company.”
Source: proceso
