Introduction to Petróleos Mexicanos (Pemex)
Petróleos Mexicanos, commonly known as Pemex, is the Mexican state-owned petroleum company and a key player in the global energy market. Established in 1938, Pemex is responsible for exploring, extracting, refining, and marketing oil and natural gas in Mexico. Given its crucial role in the country’s energy sector, Pemex’s financial health and stability are of significant importance to both Mexico and international investors.
Pemex’s Debt Issuance and S&P Rating
S&P National Ratings has assigned the highest possible rating, “mxAAA,” to Pemex’s upcoming debt issuance of 31.5 billion pesos in the local stock market. This maximum rating reflects the strong support from the Mexican federal government, which includes incentives and capacity to back the company.
Details of the Debt Issuance
Pemex will issue three bonds with the following terms:
- Pemex-26: 5.2 years, in pesos, with a variable monthly coupon rate and a single principal payment at maturity.
- Pemex 26-2: 8.5 years, in pesos, with a fixed nominal semiannual coupon rate and full principal payment at maturity.
- Pemex 26U: 10.5 years, in Units of Investment (udis), with a fixed real semiannual coupon rate and full principal payment at maturity.
All the funds from this debt issuance will go directly to Pemex’s treasury and be used to pay off financial liabilities maturing in 2026.
Government Support and Financial Implications
S&P highlighted that this operation has a neutral impact on Pemex’s debt levels and credit indicators. Despite the substantial financial assistance from the Mexican federal government, S&P estimates that Pemex’s credit profile will remain highly leveraged for the next 12 months, with a debt-to-EBITDA ratio above 6x and interest coverage below 2x.
Government Support for Pemex
Extensive Government Aid:
Throughout 2025, transfers from the federal government to Petróleos Mexicanos (Pemex) have significantly increased, surpassing the approved budget and even outpacing allocations for other sectors like housing and environment. According to data from Mexico’s Secretariat of Finance and Public Credit, Pemex received 392 billion pesos in transfers via the Secretariat of Energy between January and November 2025. This amount represents a historical high, exceeding the approved budget for 2025 by more than 256 billion pesos.
These substantial government transfers have placed immense pressure on public spending, making fiscal consolidation increasingly unlikely. Mexico Evalúa, an independent civil organization, has pointed out the unprecedented levels of support for Pemex and its implications on public finances.
Managing Pemex’s Financial Position
To address short-term liabilities and improve its financial balance, the federal government issued 13.8 billion USD in debt and repurchased 12 billion USD worth of Pemex bonds. This move was in line with Pemex’s strategic plan for 2025-2035, as announced on September 2. The bond rebuy offer closed on September 15, attracting 12 billion USD from public investors, with 9.9 billion USD corresponding to maturities between 2026 and 2029.
The federal government’s newly issued bonds will pay twice the premiums offered for Portuguese, French, or German bonds. Additionally, these bonds will provide premiums 60% above those of five-year sovereign bonds from the United Kingdom or the United States.
Key Questions and Answers
- What is Petróleos Mexicanos (Pemex)? Pemex is Mexico’s state-owned petroleum company responsible for oil and natural gas exploration, extraction, refining, and marketing.
- Why is the S&P rating important for Pemex? The maximum “mxAAA” rating from S&P reflects the strong support from the Mexican federal government, indicating a lower risk for investors.
- What are the terms of Pemex’s upcoming debt issuance? Pemex will issue three bonds with varying terms, including maturities of 5.2 years, 8.5 years, and 10.5 years, all denominated in pesos or Units of Investment (udis).
- How will the government support impact Pemex’s financial position? Despite substantial government aid, S&P estimates that Pemex will remain highly leveraged for the next 12 months. However, these funds will help manage short-term liabilities and improve the company’s financial balance.
- What are the implications of increased government transfers to Pemex? The significant transfers have placed immense pressure on public spending, making fiscal consolidation unlikely and raising concerns about Mexico’s long-term financial sustainability.
