MEXICO CITY — Moody’s Investors Service on Tuesday downgraded Mexico’s state power utility, the Comision Federal de Electricidad (CFE), to Baa2 from Baa1, following its recent lowering of the country’s overall credit rating.
The downgrade is largely due to the company’s dependence on the state, Moody’s said in a statement.
CFE’s baseline credit assessment dropped amid “the expected weaker intrinsic credit strength in light of Mexico’s energy policies and a high natural gas price environment,” the ratings agency said.
Moody’s added that it expected CFE’s financial performance to remain weak in the next 18-24 months.
The ratings agency said the outlook for CFE improved to “stable” from “negative,” after Moody’s changed its outlook for Mexico to “stable” last week.
The new outlook takes into account expectations that the utility’s performance will gradually improve in 2023 as gas prices stabilize. (Reporting by Kylie Madry; Editing by Richard Chang)