Mexico

Bonds of Petroleos Mexicanos declined on Monday after Moody’s Investors Service downgraded the firm’s credit score further into junk territory, saying the state oil company would be near default without support from the Mexican government, Bloomberg News reported. Pemex’s notes due in 2030 fell as much as 2.9 cents on the dollar to 84.6 cents, according to Trace data compiled by Bloomberg. The extra yield investors demand to hold Pemex’s debt due in about six years over the Mexican sovereign widened more than 60 basis points to 4.93 percentage points.

Mexican lender Unifin has concluded its bankruptcy proceedings, the company said in a filing on Monday, following the approval of its plan to restructure debts by a local court, Reuters reported. Unifin's business model focuses on offering specialized financing to companies, as well as car loans. In 2022, a court approved Unifin's voluntary application for declaration of bankruptcy, a move the firm said would help it protect assets and hold talks with creditors. The lender's last published quarterly results from the second quarter of 2022 showed financial liabilities of around $4 billion.

Mexico’s economy slowed more than forecast in the fourth quarter on waning exports and household consumption, fueling bets the nation’s central bank will start interest rate cuts in coming months, Bloomberg News reported. Gross domestic product expanded 0.1% on a quarterly basis, less than the 0.3% median estimate of economists surveyed by Bloomberg. From a year earlier, it grew 2.4%, below the 3% median forecast, according to preliminary data released Tuesday by Mexico’s national statistics institute. For for the full year of 2023, Mexico’s economy expanded 3.1%.

Unifin Financiera SAB de CV has submitted a restructuring deal before a Mexican bankruptcy court that will turn control over to creditors and infuse the lender with government financing, Bloomberg News reported. A judge in Mexico City is weighing the plan, which the company filed last week after winning support from a majority of creditors. A Unifin representative confirmed the submission of the plan to the court. Unifin earned their backing after sweetening the offer for unsecured debt holders — including those with $2.4 billion of foreign bonds.

Mexico's antitrust authority said on Wednesday it was investigating the country's freight rail transportation market amid government plans to build out railway infrastructure, Reuters reported. Without mentioning any companies by name, the antitrust watchdog Cofece said there were elements suggesting the "absence of competitive conditions" in the industry. Mexico's rail sector, which moves a quarter of the total merchandise transported by land, is dominated by Canadian Pacific Kansas City (CPKC) and Grupo Mexico's transport unit.

Two weeks into its operations, Mexico state airline Mexicana de Aviacion’s slow ramp-up has allowed some passengers the experience of private travel, Bloomberg News reported. A report from YouTube user Jorge de Leon showed him ecstatic to fly in a completely empty plane from Ciudad Victoria, Tamaulipas, to Mexico City’s Felipe Angeles airport, on a flight in the airline’s first week of operation. Three people had flown that route the previous day according to the crew, he noted.

Mexico’s consumer prices rose more than expected in December with increased spending during the holiday season keeping pressure on the central bank as it starts considering an interest rate cut in coming months, Bloomberg News reported. Consumer prices rose 4.66% compared to the same period a year earlier, up from 4.32% in November, the national statistics institute reported Tuesday. The print was also above the 4.57% median estimate of analysts in a Bloomberg survey.

Mexico kicked off 2024 emerging-market sovereign bond sales with the largest deal on record for the Latin American country, Bloomberg News reported. The nation raised $7.5 billion with the sale of benchmark global dollar notes due in five, 12 and 30 years, according to people with knowledge of the matter, who asked not to be identified because they’re not authorized to speak about it. While sentiment across global markets was negative, orders for the deal had reached $20 billion, the people said.

Mexico's central bank could weigh a rate cut in the first quarter of 2024, the bank board's governor said in an interview published on Monday, Reuters reported. "Inflation has dropped significantly, but we need to be cautious," central bank governor Victoria Rodriguez said in an interview with local outlet El Financiero. "When downward (rate) adjustments occur, we are anticipating them to be gradual." Mexico's annual inflation hit 4.32% in November, ending a nine-month slowing streak and still above the bank's target of 3% plus or minus one percentage point.