Mexican president says Pemex will pay debt, vows to boost finances

By Ana Isabel Martinez

MEXICO CITY (Reuters) – Mexican state oil firm Pemex will make all of its debt payments, President Andres Manuel Lopez Obrador said on Thursday, promising measures to shore up its finances after credit ratings agency Fitch downgraded the firm’s rating last month.

Lopez Obrador, a veteran leftist who took office in December, said that he will present a plan on Friday to strengthen Pemex’s finances. One source of funding will be savings from the government’s fight against fuel theft, he said.

“Pemex will never fail to fulfill an obligation,” Lopez Obrador said in response to a question during his regular morning press conference about whether his government would refinance or restructure Pemex’s debt. “We will pay all of the obligations punctually.”

Rating agency Fitch downgraded Pemex’s credit rating in late January, citing the company’s high leverage and tax burden. Pemex holds roughly $103 billion in financial debt, the highest of any state oil firm in Latin America.

Investors worry that if the company loses investment grade Mexico’s sovereign debt could also be downgraded.

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