Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>We maintain Overweight on Pemex, anchored by Mexico’s extraordinary support that effectively shifts refinancing needs to the sovereign balance sheet. </li>
<li>We prefer the 2032s for value in the belly and the 2050s for long-end carry and upside. </li>
<li>Near-Term credit remains well-supported, but structural production and downstream weaknesses limit medium-term tightening potential.</li>
</ul>


We maintain Overweight on Pemex, anchored by Mexico’s extraordinary support that effectively shifts refinancing needs to the sovereign balance sheet. 
We prefer the 2032s for value in the belly and the 2050s for long-end carry and upside. 
Near-Term credit remains well-supported, but structural production and downstream weaknesses limit medium-term tightening potential.


Pemex 3Q25: Extraordinary Sovereign Support Reprices Pemex Tighter

<ul>
<li>Argentina’s election setback hit bonds, peso, and equities, reviving “Kicillof risk” and raising concerns over reform momentum, legislative gridlock, and elevated political risk premia.</li>
<li>Suzano priced $1bn 2036s inside guidance, highlighting strong demand and proactive liability management, while Pemex’s $9.9bn buyback and Moody’s B1 upgrade underscored sovereign support.</li>
<li>Markets diverged: LatAm credit widened on Argentine risk, EM and U.S. indices tightened, Argentina’s equities plunged, Brazil and Mexico rallied, oil softened, and U.S. Treasury yields declined.</li>
</ul>


Argentina’s election setback hit bonds, peso, and equities, reviving “Kicillof risk” and raising concerns over reform momentum, legislative gridlock, and elevated political risk premia.
Suzano priced $1bn 2036s inside guidance, highlighting strong demand and proactive liability management, while Pemex’s $9.9bn buyback and Moody’s B1 upgrade underscored sovereign support.
Markets diverged: LatAm credit widened on Argentine risk, EM and U.S. indices tightened, Argentina’s equities plunged, Brazil and Mexico rallied, oil softened, and U.S. Treasury yields declined.


<ul>
<li>LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.</li>
<li>In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.</li>
<li>MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.</li>
</ul>


LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.
In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.
MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.


Weekly News & Views - 2Q25 Earnings Recap

<ul>
<li>U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts</li>
<li>Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals</li>
<li>Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case</li>
</ul>


U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts
Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals
Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case


<ul>
<li>The LatAm Aggregate Index contracted by 17 bps to 315 bps in the week ending Friday, May 16, 2025, and is now trading 26 bps below its 3-month average.</li>
<li>MELI 1Q25: Impressive Growth, Little Room for Further Spread Compression / YPF 1Q25: Margin Expansion and Strategic Progress Back Outperformance View</li>
<li>Suzano 1Q25: Credit Metrics Improve Despite EBITDA Miss, Remain Outperform / Minerva 1Q25: Integration and Deleveraging Underpin Outperformance View</li>
</ul>


The LatAm Aggregate Index contracted by 17 bps to 315 bps in the week ending Friday, May 16, 2025, and is now trading 26 bps below its 3-month average.
MELI 1Q25: Impressive Growth, Little Room for Further Spread Compression / YPF 1Q25: Margin Expansion and Strategic Progress Back Outperformance View
Suzano 1Q25: Credit Metrics Improve Despite EBITDA Miss, Remain Outperform / Minerva 1Q25: Integration and Deleveraging Underpin Outperformance View


Mexico

Petroleos Mexicanos operates as an oil and gas exploration and production services. The Company offers pipeline carriage, petrochemical distributor and shipping centers, logistics, and fuel commercialization services. Petroleos Mexicanos serves customers in Mexico.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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Dividend (Yield)	0.00

Petroleos Mexicanos (1232Z MM)

Pemex 3Q25: Extraordinary Sovereign Support Reprices Pemex Tighter

Pemex's credit outlook remains positive due to Mexico's strong support, with strategic bond preferences for value and long-term gains. Structural...

Leandro Gubler

EM Spreads - Weekly News & Views

Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

EM Spreads - Weekly News & Views

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

EM Spreads - Weekly News & Views

LatAm Aggregate Index down to 315 bps, trading below 3-month average. MELI and YPF show growth, Suzano and Minerva credit metrics improve.

Leandro Gubler

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pemex 3Q25: Extraordinary Sovereign Support Reprices Pemex Tighter

​Pemex's credit outlook remains positive due to Mexico's strong support, with strategic bond preferences for value and long-term gains. Structural...

Leandro Gubler

EM Spreads - Weekly News & Views

​Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

​LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

EM Spreads - Weekly News & Views

​US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

EM Spreads - Weekly News & Views

​LatAm Aggregate Index down to 315 bps, trading below 3-month average. MELI and YPF show growth, Suzano and Minerva credit metrics improve.

Leandro Gubler

Pemex's credit outlook remains positive due to Mexico's strong support, with strategic bond preferences for value and long-term gains. Structural...

Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

LatAm Aggregate Index down to 315 bps, trading below 3-month average. MELI and YPF show growth, Suzano and Minerva credit metrics improve.