MEXICO · PEMEX · RATINGS
Key Facts
- The country Mexico is Latin America’s second-largest economy, and its state oil company Pemex is among the biggest borrowers in emerging markets.
- What happened On Thursday 15 October 2026, HR Ratings cut Pemex’s global-scale rating from HR BBB+ to HR BBB, with a stable outlook.
- Why it was cut The agency treats Pemex’s debt as backed by the Mexican state, so the oil company followed the government’s own downgrade the same day.
- The debt Pemex owed 1.353 trillion pesos (about US$77.5 billion) at the end of June 2026, 11.6% less than at the end of 2025.
- Power Index Mexico ranks 2nd of 14 in The Rio Times Latin America Power Index, with 71.4 points (October 2026 edition).
- What it means for you On HR’s scale BBB is still an investment-grade rating, so this is a warning signal for bond investors rather than a break in Pemex’s finances.
- Still open Whether other agencies follow the Pemex rating cut, and how much more federal money Pemex needs to repay its debts.
A Pemex rating cut came on Thursday 15 October 2026 from HR Ratings, a Mexican credit rating agency. It lowered the rating of Pemex, Mexico’s state oil company, one notch from HR BBB+ to HR BBB, with a stable outlook.
The move follows the agency’s downgrade of Mexico’s own sovereign rating the same day, because it treats Pemex’s debt as backed by the state. For US investors who hold Mexican bonds, it is another sign that the oil company’s finances and the government’s cannot be separated.
What HR Ratings Changed for Pemex
The Pemex rating cut lowered the global-scale rating from HR BBB+ to HR BBB on Thursday 15 October 2026, according to Expansión and Forbes México. Forbes México reported that the change covers the 25 issues of debt Pemex has outstanding.
A stable outlook means the agency does not expect another change in the short term. In its local-scale ratings, which compare Mexican borrowers with one another, HR kept Pemex at HR AAA and HR+1, both stable.
Why Pemex Follows the Government’s Rating
HR Ratings says Pemex holds a “de facto sovereign” status, meaning the agency treats the Mexican state as standing behind its debt in practice. It points to federal contributions for debt payments, capital spending and fiscal support.
The agency also notes that Pemex is an important source of revenue for the country, which strengthens the link between the company and the government. HR described the Pemex rating cut as in line with the adjustment to Mexico’s sovereign rating.
The same day HR cut Mexico’s sovereign rating to HR BBB, as set out in HR Ratings Mexico Downgrade Reasons Explained. For the background on the company itself, see What Is Pemex?.
Pemex’s Debt and Cash Flow in Numbers
Pemex’s total debt stood at 1.353 trillion pesos (about US$77.5 billion) at the end of June 2026, according to Expansión citing HR Ratings. That was 11.6% less than at the end of 2025, or 9.1% less in dollars, down from US$85.2 billion.
HR said the fall came mainly from debt repayments that were covered by contributions from the federal government. Net debt, which subtracts cash, also fell in both pesos and dollars.
Pemex’s revenue dropped 8.6% in 2025 because of a lower price for Mexican export crude and smaller export volumes. In the first half of 2026 it rose 11.3%, driven by a 17.4% rise in domestic sales.
First-half revenue reached 876 billion pesos (about US$47.5 billion at 18.46 pesos to the dollar on 16 October 2026). Forbes México said higher reference prices also helped.
Production of oil and other liquids averaged 1.655 million barrels a day in the second quarter, 2% more than a year earlier. Without condensates, a light form of liquid hydrocarbons, crude output was nearly flat at 1.367 million barrels a day.
HR expects net debt to ease slowly, to 1.298 trillion pesos (about US$70.3 billion) in 2026 and 1.250 trillion (about US$67.7 billion) in 2028. That path assumes continued refinancing and capital from the federal government.
The agency sees adjusted free cash flow, the cash left after costs and investment, at 210 billion pesos (about US$11.4 billion) in 2026. That compares with 126 billion pesos (about US$6.8 billion) in 2025, and HR expects 173 billion pesos (about US$9.4 billion) in 2027.
For 2026 HR assumes an average price of US$82.39 a barrel for Mexican export crude, 34.8% above the 2025 average. For 2026 to 2028 it assumes an average of US$79.44 a barrel.
What Pemex Says About the Decision
Pemex highlighted that HR Ratings affirmed its local-scale ratings, Forbes México reported. It also cited the agency’s recognition of lower debt, improved revenue and cash flow, a better maturity profile and stronger liquidity.
The company pointed to an operational recovery in 2026, including higher liquids production and a reserve replacement rate above 100%, the same report said. A rate above 100% means a company has added more oil reserves than it has pumped.
What Could Move the Rating Next
According to Forbes México, HR said a change in the Pemex relationship with the government could alter the rating. That would happen if the debt no longer had state backing, and any move in Mexico’s sovereign rating or outlook would pass straight into Pemex.
That ties the next Pemex rating cut or upgrade to every future decision on Mexico’s own rating. The sovereign outlook is stable after the 15 October cut, as is Pemex’s.
What It Means for You
For US investors in emerging-market bond funds, the Pemex rating cut is a reminder that HR treats Pemex debt as a government risk. A one-notch move by one agency is a signal rather than a shock, and BBB is still investment grade on HR’s scale.
Nothing in the announcement changes fuel prices, flights or public services for drivers, travellers or residents in Mexico. Pemex’s local-scale rating stayed at HR AAA.
What Is Not Known
It is not known how Pemex’s bonds traded when markets opened on Friday 16 October. It is also open whether other rating agencies will follow with their own moves on Pemex.
How much more federal money Pemex will need to repay its debts after 2026 is open, and HR’s forecast assumes continued contributions and refinancing. Forbes México added that the agency does not expect Pemex’s own surplus to end that support until at least 2029.
More: Mexico news in English, every day from The Rio Times.
Frequently Asked Questions
What did HR Ratings do to Pemex?
The Pemex rating cut on Thursday 15 October 2026 lowered its global-scale rating from HR BBB+ to HR BBB. The outlook is stable, and the change covers 25 bond issues.
Why did Pemex fall with Mexico?
HR Ratings treats Pemex as a de facto sovereign, because the federal government pays part of its debt service and funds its investment. A change in Mexico’s rating therefore passes straight into the oil company’s rating.
Is Pemex still investment grade after the rating cut?
On HR’s own scale the new HR BBB rating is still investment grade, and the outlook is stable. Other agencies rate Pemex separately and were not part of this decision.
How much debt does Pemex have?
At the end of June 2026 its total debt was 1.353 trillion pesos (about US$77.5 billion). That was 9.1% less in dollars than at the end of 2025.
Does the downgrade affect fuel prices in Mexico?
Nothing in HR’s announcement changes fuel prices or services. The rating is an opinion on how likely Pemex is to repay its debt.
Sources: Expansión, Pemex downgrade, 15 October 2026; Forbes México, 15 October 2026; Expansión, Mexico sovereign downgrade, 15 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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