April 13, 2019 / 3:23 PM / a month ago

No further cut to Pemex credit rating expected -Mexican minister

FILE PHOTO: Mexico's Finance Minister Carlos Urzua listens as President Andres Manuel Lopez Obrador (not pictured) speaks to the media during a news conference to announce a plan to strengthen finances of state oil firm Pemex, at the National Palace in Mexico City, Mexico February 15, 2019. REUTERS/Henry Romero/File Photo

WASHINGTON (Reuters) - Mexican Finance Minister Carlos Urzua said on Saturday he does not expect rating agencies to further downgrade the credit rating of state-owned energy company Pemex.

With $106 billion in financial debt, Pemex is the world’s most indebted oil company and is teetering on the brink of having its debt downgraded to below investment grade.

“We don’t believe Pemex’s credit rating will be downgraded,” Urzua said in a press conference at the IMF and World Bank spring meetings in Washington.

Urzua said that if he was a foreign investor, “I’d be buying Pemex debt because Pemex likely won’t have to go out (to the debt market) this year,” which he said would make the existing bonds appreciate in value.

Earlier this year credit rating agency Fitch cut Pemex’s rating by two notches to BBB-, the lowest investment grade rating, and assigned a negative outlook. A further downgrade to ‘junk’ territory would likely force some of the debt holders to sell.

Reporting by Rodrigo Campos; Editing by Paul Simao

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