Mexico just pulled off one of the larger sovereign debt maneuvers in recent memory, issuing $13.8 billion in new bonds across US dollar and euro denominations. The purpose: buying back existing debt that’s coming due soon, while credit rating agencies sharpen their knives.
The buyback targets roughly $9.9 billion in notes maturing between 2026 and 2029. In plain terms, Mexico is swapping out debt that’s about to come due for longer-dated obligations, buying itself breathing room at a moment when the fiscal picture looks increasingly uncomfortable.
The Pemex problem that won’t go away
At the center of this story, as it has been for years, sits Petróleos Mexicanos. Pemex, the state-owned oil giant, carries one of the heaviest debt loads of any energy company on the planet. And the Mexican government has made clear, repeatedly, that it will backstop the company rather than let it sink.
Moody’s apparently thinks we’re getting close to that point. The agency downgraded Mexico’s sovereign credit rating from Baa2 to Baa3 in May 2026, citing fiscal vulnerabilities and the ongoing need to prop up Pemex. Baa3 is the lowest rung of investment-grade territory. One more notch down and Mexico enters junk status, which would trigger forced selling by institutional investors who are mandated to hold only investment-grade debt.
