Mexico`s finance ministry is exploring possibilities to reduce the costly refinancing of ailing state oil company Pemex`s debt this year, including dipping into a budget stabilization fund, Finance Minister Carlos Urzua said on Friday.
Urzua told Reuters in an interview that Pemex`s weak credit rating could make it "very costly" to refinance the more than $6 billion of payments that are due this year.
"It could be costly, very costly to refinance the debt that matures this year," Urzua said, citing foreign and domestic investor fears about Pemex`s credit rating, which is one notch above junk, and the perception of risk about the company.
Holding more than $106 billion in total debt, Pemex owes more than any other oil company in the world, both private and state-owned, that file reports with the U.S. Securities and Exchange Commission.
The finance ministry and Pemex are considering ways to reduce the amount that needs refinancing, Urzua said.
"We don`t know how much would be optimal, it would not necessarily be a case of helping them with all of it," he said.
Urzua confirmed comments by his deputy finance minister this week that one option would be to dip into Mexico`s Public Income Stabilization Fund, although he said a final decision had not been taken.
"We could take a certain amount that helps with the debt servicing in a one-off manner," he said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)