Moody's Rating Assignment
Moody's Investors Service has assigned a Baa3 rating with a stable outlook to senior unsecured yen‑denominated bonds issued by the Government of Mexico. The rating mirrors Mexico’s long‑term issuer rating of Baa3.
The bond programme consists of four proposed series with maturities ranging from three years and six months to twenty years, amounting to an aggregate principal of JPY 282,800 million. The bonds are direct, general, unconditional and unsubordinated public external indebtedness of Mexico, ranking equally with all other unsubordinated public external indebtedness and without preference among themselves.
Mexico plans to allocate the proceeds from the issuance to general government purposes and to fund budgetary programmes that qualify as Eligible Expenditures under the Sustainable Development Goals (SDG) Sovereign Bond Framework. These expenditures are incorporated in Mexico’s Federal Expenditure Budget for fiscal year 2026 and the allocation is authorized under Article 2 of the Federal Revenue Law for 2026.
Moody’s forecasts Mexico’s real economic growth to remain subdued in 2026 at approximately 1 percent. The outlook notes weak momentum in manufacturing and construction, which offset modest gains in other sectors. Lower construction activity is attributed to reduced public investment after completion of major infrastructure projects, while private investment has softened due to structural constraints and uncertainty surrounding trade relations and institutional changes.
Fiscal pressures are highlighted, with the deficit widening sharply in 2024, higher interest costs, rigid current spending, and continued support to Petróleos Mexicanos (PEMEX) limiting fiscal consolidation. Government debt is projected to continue rising, constraining fiscal space and increasing vulnerability to adverse shocks in a context of subdued growth.