COLOMBIA: Gas Prices Cut

"Colombia to Cut Gasoline Prices by COP500/Gallon From March 1" - Bbg

MEXICO: Pemex: Q4 2025 Earnings – Neutral

Our main concern remains ability to pay future debt and supplier obligations as the earnings conference call raised more questions than answers. Pemex spreads tightened over the past year which reflected substantial debt reduction and government support, but the government has made clear that they expect a substantial turnaround in operating results to continue that support. * Q4 earnings were better than in past quarters but further progress is needed. Pemex succeeded in not losing money in Q4, increased refining processing output and stemmed the decline in oil production as new fields replaced declining production from mature fields. * PEMEX 50s were quoted at $91.14, 8.57% YTW 397 G-Spd, 13bp wider MTD and 10bp wider YTD. Spread to the Mexico (MEX; Baa2neg/BBB/BBB-) sovereign was 223bp, in from 375bp a year ago as the government demonstrated significant financial support throughout last year. * By some accounts, Pemex still has about $24bn in supplier debt outstanding. A consortium of Mexico development banks led by Banobras organized a MXN250bn fund to help pay suppliers but only MXN60bn ($3.5bn) remains now. When asked how it will meet those obligations Pemex said it will use internally generated cash flow, but it remains to be seen if that will be sufficient. * The $12bn PCAPS amortizing 3-year structure executed last year is not an obligation of Mexico and Pemex said on the call today that it will pay the first sinking fund payment in 2027 of $1.68bn. When asked what resources will be available to pay that debt, management said it will be discussed with the government. Pemex was able to issue bonds locally this year and when asked if they would do a USD bond, the response was they would consider financing opportunities. * Pemex has $13.4bn of debt coming due this year and $4.7bn next year. The company needs better operational results to support the $85bn remaining debt load as well as off balance sheet liabilities. The government's target is to raise oil production to 1.8mn b/d from the current 1.65mn b/d. Production was down from 1.67mn b/d in Q4 2024 but at least the decline was minimal as new fields have managed to offset declining production from existing mature fields. There are 7 contracts already to explore for incremental production but the verdict is still out on whether they will succeed and the clock is ticking.

COLOMBIA: Citi Turn Neutral COP, From OW, On Election Concerns

* Citi have cut their overweight call and turned neutral on the Colombian peso, according to a report on Bloomberg, following the recent Invamer poll which showed leftist senator Ivan Cepeda with a wide lead in the Presidential election race. * As a reminder, the poll suggested that in a run-off scenario between Cepeda and right-wing candidate de la Espriella, Cepeda would win with 59.4% of the vote, against 37.4% for de la Espriella. * Citi note that the poll suggests that Cepeda's campaign is strengthening, while support for right-wing candidate de la Espriella has plateaued. Although the COP will still find some support from the hawkish central bank, Citi is wary of rising political noise ahead of the March 8 legislative elections and presidential primaries. They would prefer to wait for the results from those primaries before re-entering Colombia trades.

LATAM: Week Ahead: Brazil Q4 GDP, Chile/Colombia/Peru CPI Inflation

Download Full Report Here: https://media.marketnews.com/Latam_Week_Ahead020326_d40d9b43b0.pdf Our Latam Week Ahead document highlights the major data releases and events scheduled across Latam next week. The document also includes the most pertinent macro developments over the past week. * In Brazil, Q4 GDP growth is expected to slow further as the very restrictive monetary policy stance continues to weigh on the economy. * Meanwhile, Chile CPI inflation looks set to dip further below the 3% target in February, keeping the door open to a potentially final BCCh rate cut later in March. * In contrast, core inflation pressures are likely to rise further in Colombia as the impact of the minimum wage increase continues to feed through, keeping pressure on BanRep to hike rates further for now. * Elsewhere, President Milei will open the ordinary sessions of Congress in Argentina on Sunday 1st March, when he will set out his policy agenda for the coming year.