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Bond Market News
CFE Downgraded to Baa3 by Moody’s
May 22, 2026
Comisión Federal de Electricidad (CFE) was downgraded by a notch to Baa3 from Baa2 by Moody’s. The downgrade is a direct consequence of the sovereign’s downgrade yesterday to Baa3. As per Moody’s, CFE benefits from “very strong” government support and “very high” default dependence on the Mexican state, which lifts its rating three notches above its standalone credit quality. On a standalone basis, CFE’s baseline credit assessment (BCA) remains at ba3. This reflects the company’s dominant market position as Latin America’s largest electric utility by installed capacity, adequate liquidity, and a diversified funding base. However, CFE faces significant exposure to natural gas price volatility and foreign exchange risk, both of which are only partially mitigated through hedging. Adding to this, CFE faces a large capital investment plan of ~$30bn through 2030, which introduces meaningful execution risk and will require incremental debt financing. According to Moody’s, a material deterioration in cash flow metrics or liquidity would put downward pressure on CFE’s BCA ratings.
CFE’s dollar bonds traded marginally lower. Its 3.875% 2033s were down 0.5 points to 85.8, yielding 6.4%.
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