Ratings agency Fitch downgraded Mexican state oil firm Pemex on Friday to BB-, its second downgrade this month, in line with a cut to Mexico's sovereign rating on fears that the coronavirus will trigger recession in Latin America's second-largest economy.
Fitch last downgraded Pemex just two weeks ago, putting it deeper into "junk" territory at BB.
Fitch noted that Pemex's rating is three notches below Mexico's sovereign, which is BBB-, and cited ongoing "deterioration" of its stand-alone credit profile.
The deterioration reflects Pemex's "limited flexibility to navigate the downturn in the oil and gas industry given its elevated tax burden, high leverage, rising per-barrel lifting costs and high investment needs to maintain production and replenish reserves," Fitch said in a statement.
Fitch also revised Pemex's outlook to stable from negative.
On Wednesday, Fitch cut Mexico's sovereign rating to BBB- with a stable outlook, and forecast that the Mexican economy will contract by at least 4% this year and that the general government deficit will widen.