Three days after lowering the outlook for Mexico’s credit rating to negative from stable, Standard & Poor’s did the same today for the state oil company.

The ratings agency maintained Pemex’s global investment grade rating at BBB+ but lowered its standalone credit profile to B- from BB- “owing to the continued deterioration in the profiles of business and financial risk” at the company.

In a statement, S & P said the government’s US $5.5-billion rescue package for the heavily-indebted state-run company falls short of the funding it requires.

“We consider that the financial plan to restore the credit fundamentals of the oil company is insufficient with respect to its multi-annual capital investment needs,” it said.

S & P said while it was reassured by the government’s commitment to meet all of Pemex’s financial obligations, to avoid “further deterioration” the company could require at least US $20 billion over several years.

The oil company has debt of US $107 billion and several large repayments to meet this year while battling to reverse output declines that have plagued it for a decade and a half.

In January, Fitch Ratings cut its rating of Pemex to just one notch above junk and speculation has since grown that Mexico’s sovereign rating could also be downgraded.

Explaining its revised outlook for Mexico’s credit rating from stable to negative, S & P said Friday that there was a one-in-three chance of a downgrade over the coming year.

Moody’s Investor Service has also said that its outlook for Mexico is under severe pressure because of debt and problems at Pemex.

Source: El Economista (sp), Financial Times (en), Reuters (en)