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Economy

UPDATE 2-Mexico poised to provide Pemex with 'extraordinary support' -S&P

(Recasts first sentence with details on Pemex support, adds comments by S&P analyst, oil industry details)

MEXICO CITY, March 27 (Reuters) – Mexico’s government will likely prop up state oil firm Petroleos Mexicanos (Pemex) due to its vulnerability to low crude prices as coronavirus erodes demand, S&P Global Ratings said Friday, a day after it cut the ratings of both Mexico and Pemex.

The ratings agency is the second in the past week to highlight Latin America’s second-largest economy as being vulnerable, after Fitch Ratings said Pemex would be the national oil company hit hardest among regional peers.

Lisa Schineller, lead analyst for S&P’s sovereign ratings in Latin America, said the government of President Andres Manuel Lopez Obrador had shown strong support for Pemex, which is laboring under a huge debt burden.

This is further complicated by the fact that Maya crude for delivery to the U.S. Gulf Coast plummeted to as low as $12.92 per barrel on March 18. Experts say Pemex is highly vulnerable to prices below $20 per barrel.

The price has since recovered somewhat, but is still below levels seen earlier this year, before the coronavirus started to roil the Americas. It closed at $14.23 per barrel on Thursday, data from S&P Global Platts showed.

Schineller also said the government was signalling that Pemex would be at the center of its agenda. Pemex is therefore unlikely to be decoupled from the sovereign rating, she added.

“The government will provide extraordinary support for Pemex – with almost complete certainty,” she said.

Both are rated BBB since the cut from BBB+ on Thursday. (Reporting by Stefanie Eschenbacher and Abraham Gonzalez in Mexico City Editing by Matthew Lewis)

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World News

Mexican government to suspend activities from Thursday

MEXICO CITY (Reuters) – Mexico’s federal government will suspend all non-essential activities beginning on Thursday, Mexico’s deputy health minister Hugo Lopez-Gatell told reporters.

Mexico registered 475 coronavirus cases on Wednesday, up from 405, and six deaths overall.

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Business

Walmart's Mexico unit says CFO to step down

MEXICO CITY (Reuters) – Walmart de Mexico said on Tuesday that its chief financial officer Olga Gonzalez has resigned for personal reasons and will leave her post by April 30.

Milton Brandt, currently chief financial officer for the retailer’s Central America operations, will become interim chief financial officer for Walmart de Mexico, known locally as Walmex.

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World News

Mexico president says gang leader 'El Marro' not target in security clashes

MEXICO CITY (Reuters) – Mexican President Andres Manuel Lopez Obrador said on Wednesday that a security operation in the Mexican state of Guanajuato was not aimed at capturing gang leader Jose “El Marro” Yepez, saying clashes in the state were a reaction to previous arrests.

Brazen skirmishes in the central city of Celaya on Tuesday led to widespread speculation that security forces had closed in on Yepez, the head of the state’s Santa Rosa de Lima criminal cartel, and possibly arrested him.

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