LatinNews Daily - 14 September 2023

* International credit rating agency Moody’s has released a new report highlighting that while Mexico’s proposed 2024 budget will ease Mexican state oil company Pemex’s liquidity stress, measures “do not address Pemex’s structural liquidity pressures as outlined in our negative outlook” which it lowered in July. The budget proposal envisages an overall reduction of 36% to Pemex, although it sets aside specific financial support for Pemex worth M$145bn (US$8.5bn). Excerpts from Moody’s report, circulated in the local and international media, say that “these measures represent a clear demonstration of government support in response to the company’s liquidity needs… [and] should provide sufficient coverage for Pemex to meet its long-term obligations totalling US$11.2bn in 2024”. However, the credit ratings agency warns that structural liquidity pressures persist “as it increases fuel production while grappling with limited capital investment ability, high debt maturities and volatile oil and fuel prices”, according to an excerpt cited by Reuters. Moody’s was also cited as expecting that the next administration, which is set to take office in late 2024, will find it increasingly burdensome to replicate the current government’s level of support for Pemex.