Posted on 04/10/2016 3:57:20 PM PDT by Lorianne
It was just a matter of time before Pemex, Mexico’s chronically indebted state-owned oil giant, began dragging down the national economy it had almost single handedly sustained for over 75 years.
The company has been bleeding losses for 13 straight quarters. As of December 31, it had $114.3 billion in assets and $180.6 billion in liabilities, a good chunk of it denominated in dollars, leaving a gaping hole of $66.3 billion (negative equity), after having been strip-mined over the decades by its owner, the government. And given these losses and the equity hole, new credit is becoming harder to come by.
Now it seems that Mexico’s worst nightmare is beginning to come true, thanks in no small part to Moody’s Investors Service. The credit rating agency last week downgraded Pemex’s credit rating from Baa1 to Baa3. In November Pemex had a perfectly respectable credit rating of Aa3; now, just six months later, it’s perilously perched just one notch above junk.
“Moody’s believes that Pemex’s credit metrics will worsen as oil prices remain low, production continues to drop, taxes remain high, and the company must adjust down capital spending to meet its budgetary targets,” the report said.
That was for Pemex. Now Moody’s also changed the outlook for Mexico’s sovereign rating from stable to negative.
This, coupled with the mounting risk of a credit downgrade, heaps further pressure on a government already struggling to shore up its balance sheet. Hardly helping matters is the fact that oil prices, a key source of government revenues, continue to languish at low levels, while the prospect of a massive bailout of Pemex looms ever larger. As if that were not enough, Mexico’s manufacturing industry is beginning to feel a very sharp pinch from weakening U.S. consumer demand.
(Excerpt) Read more at wolfstreet.com ...
Another socialist failure.
Venezuela, here we come!
That Country has kicked out the French, Spanish and the Americans, a very proud people.
Their last Revolution/Constitution was in 1824. They are way overdue and will likely slide into Anarchy and eventually Socialism/Communism.
Build the DAMN Wall!
“Build the DAMN Wall!”
We should be marketing and exporting capitalism to Mexico, and should be holding her leaders responsible for what is happening to a country that should be highly successful.
“Venezuela, here we come!”
Followed by “California here we come!”
Government-controlled Pemex has never allocated enough to maintenance and exploration. They have a permanent policy of eating the seed corn.
But, but, but it is the communist way .... so unexpected.
It was reported that Mexico has more oil reserves than Saudi. They are some 30 years behind schedule in developing the offshore reserves in Campeche Bay. They have run most of the major offshore contractors off. I did some work down there two years ago and and can only say...you can’t fix stupid.
nope..the last revolution was in 1910-1917 or so and then the Cristero War followed...oh and you are rigtht.
It turned into a Socialist/Communist country. That’s what Mexico is and only our open border keeps the country afloat. It is a sh#thole and we would do them a favor by getting them to just implode and start chopping heads.
My grandfather fought in the Revolution and with the Catholics in the Cristero War. He had his US citizenship document and a portrait of JFK on the kitchen wall.
They are communist and the PRI/PAN/PDR are the three legs of a crap filled triangle that is essentially an organized criminal organization. Communism can only survive when there is a gullible capitalistic society nearby to be a parasite on. That’s why they’re crapping their pants.
The only good thing or advice from the Mexican Government we should take is on Chiclets, Marijuana and Donkey Shows.
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