Mexico will use $13.6 billion from a central bank surplus to pay down debt and boost its rainy day fund, shoring up finances as it prepares a support plan for the beleaguered state oil company Petroleos Mexicanos.
The Finance Ministry will spend 167 billion pesos ($9.5 billion) of the transfer to buy back debt and reduce bond issuance this year, while 70 billion pesos will go to boost the nation’s budget revenue stabilization fund. A plan to help Pemex will be released in coming days, the ministry said in a statement released after the central bank disclosed the surplus.
The government’s response comes after Pemex reported a record $32 billion-loss for 2015, which prompted Moody’s Investors Service to cut its credit rating two notches in March. Finance Ministry officials have repeatedly said that they could give Pemex a capital injection once the company presents a credible business plan.
“What is important is not the funds that you transfer to Pemex, but the quid pro quo for receiving those funds,” said Alberto Ramos, the chief Latin America economist at Goldman Sachs Group Inc., in a telephone interview. “If that leads to a leaner and meaner company, I think that’s understandable. Pemex needs to adjust to the new oil price reality and to the more competitive sector.”