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AMOV - America Movil SAB De CV News Story

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Last Trade - 12/05/21

Large Cap
Market Cap £34.50bn
Enterprise Value £58.72bn
Revenue £35.98bn
Position in Universe 256th / 6853

UPDATE 5-S&P cuts Pemex credit rating as outlook sinks for other Mexican firms, banks

Mon 4th March, 2019 7:11pm
* S&P cuts Pemex stand-alone rating to B- from BB-
    * S&P cuts credit outlook to "negative" from "stable"
    * Agency says Pemex needs $20 bln of support for many years
    * S&P also takes action on 77 Mexican financial companies

 (Recasts headline, adds lowered outlook for Mexican financial
    MEXICO CITY, March 4 (Reuters) - Ratings agency Standard &
Poor's (S&P) on Monday slashed the credit rating for Mexico's
national oil company Petroleos Mexicanos, or Pemex, piling more
pressure on the government to tighten up the debt-laden oil
firm's finances.
    S&P followed the Pemex cut with lower credit outlooks for a
range of major Mexican financial institutions and companies,
including telecommunications giant America Movil and Coca-Cola
Femsa, the world's largest Coke bottler. 
    The agency's moves highlight overall concerns with the
Mexican government's debt load and spending plans that were
raised when S&P lowered the government's credit outlook to
negative on Friday.*:nL3N20O5HX 
    S&P cut its stand-alone assessment of Pemex  PEMX.UL  to
'B-' from 'BB-', reflecting growing concern that financial
support pledged by the government to shore up the firm and its
slowing production will not be enough.
    The agency also cut Pemex's outlook to negative from stable
while keeping its global investment grade rating at 'BBB+', in
line with the Mexican government.
   The peso currency  MXN=  dipped as much as 0.6 percent on
Monday after the S&P moves, though it rebounded to end the
trading day up 0.04 percent. At 404 GMT the peso was up 0.09
percent at 19.32 to the U.S. dollar.  
    The bleaker outlook reflects concern that the government's
plan to clean up Pemex's  PEMX.UL  finances is insufficient, S&P
said, adding that the company is exposed to political decisions
that could conflict with its financial objectives.
    "The government's financial support, in order to restore
credit fundamentals, falls well short of the company's
multi-annual capital investment needs," S&P said in a statement.
    Citing the fiscal pressures facing Mexico's government and
economy, S&P later also lowered the outlook to "negative" from
"stable" for America Movil  AMXL.MX , Coca-Cola Femsa  KOFL.MX ,
and upscale retailer Liverpool  LIVEPOLC1.MX , but kept their
ratings unchanged.
    The lowered outlook reflects the exposure that these
companies face from the government's financial vulnerabilities,
describing firms in telecommunications and beverages as
"moderately sensitive" to country risk.
    The agency added that it would consider a one-notch
downgrade for both America Movil and Coca-Cola Femsa if it were
to downgrade the Mexican government. 
    S&P also took action on Monday on nearly 80 Mexican
financial institutions, again citing the outlook change for the
government, including at least several banks that saw their
outlook lowered from "stable" to "negative."
    They included Citibanamex, the local unit of Citigroup Inc,
and Banco Inbursa, which is controlled by the family of
billionaire Carlos Slim.
    "The rating action on the 77 Mexican financial institutions
reflect the potential deterioration of the sovereign's credit
quality and the possible contagion to the local banking
industry," the agency said in a statement.
    Mexican President Andres Manuel Lopez Obrador has in the
past dismissed ratings agencies' assessments, and he has
repeatedly pledged to revive Pemex, which had financial debt of
nearly $106 billion at the end of 2018.
    The leftist populist has promised to boost Pemex's oil
output, which dropped to just 1.62 million barrels per day in
January, the lowest since public records began in 1990.
    Last month, Lopez Obrador said his government would inject
$3.9 billion into Pemex to strengthen its finances and prevent a
further credit downgrade, shortly after rating agency Fitch cut
the company to just one level above junk status.*:nL1N20B01F
    S&P said on Monday that Pemex could require at least $20
billion over multiple years to avoid "further deterioration." 
    Mexico's finance ministry said it would not offer any
reaction on Monday to the S&P move. Pemex declined to comment.
    S&P said the three-notch drop in Pemex's stand-alone credit
profile was in part due to the fact that the company's core
businesses are underperforming its previous expectations.
    "Also, the continued loss in operating efficiencies has the
national refining system running at less than 40 percent of
installed capacity," S&P said.

 (Reporting by Daina Beth Solomon, Dave Graham and David Alire
Garcia; Editing by Sandra Maler and Christian Schmollinger)
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