December 20, 2019 / 1:43 AM / a month ago

UPDATE 1-S&P says ratings for Mexico's Pemex remain unchanged

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MEXICO CITY, Dec 19 (Reuters) - Standard & Poor’s ratings agency said on Thursday that its ratings for Mexican state oil company Pemex remained unchanged, after affirming Mexico’s sovereign foreign currency rating and outlook.

S&P in March slashed the credit rating for Pemex, the world’s most indebted oil company, to B- from BB-, while Fitch Ratings in June cut the firm’s credit rating to speculative grade, or “junk.”

A second downgrade to junk from another major rating agency would likely trigger billions of dollars in forced selling of the company’s bonds.

S&P said its decision to hold Pemex’s ratings stable were based on the government’s pledges to support the embattled company and help it fulfill financial obligations.

“Pemex’s ratings continue to reflect our expectation of an almost certain probability of extraordinary support from the government for the company, given a scenario of financial stress,” S&P said in a statement.

Mexican President Andres Manuel Lopez Obrador has made it a priority to revive Pemex, which is struggling to reverse years of declining oil output as well as pay down massive debt. (Reporting by Daina Beth Solomon; Editing by Sandra Maler)

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