(Bloomberg) -- It didn’t take Octavio Romero, the chief executive of Petroleos Mexicanos SA, long to start ripping into Moody’s Investors Service.

The call with investors may have been about fourth-quarter results — and the profit the state-run oil giant reported — but Romero couldn’t resist the urge to blast Moody’s analysts for their decision to slash Pemex’s credit rating deeper into junk a few weeks ago. What galled Romero the most was the way Moody’s questioned the government’s commitment to keep Pemex out of default as its finances deteriorate.

“Pemex doesn’t understand where Moody’s got its information,” said Romero. “It’s irresponsible.” As a state-run company, he said, Pemex “has the full support of the Mexican government.”

To a small, but vocal, number of die-hard Pemex bond bulls who have been pocketing outsize returns for years, Romero is simply speaking the truth. Pemex is Mexico, and Mexico is Pemex and, as they see it, there’s little chance that politicians let a company so woven into the fabric of the nation default — regardless of what the balance sheet looks like.

The bulls — and Romero — have history on their side: No financially healthy government has let a state-run company of Pemex’s size and importance default in decades, according to Lee Buchheit, a lawyer who specializes in sovereign debt restructurings.

Betting on Pemex bonds has been a winning trade for years now. Because of the company’s stagnant output and hefty debt load, its foreign bonds pay yields nearly 5 percentage points more than those on the government’s bonds. 

This has generated a steady stream of income amid a selloff in global bond markets that was triggered by the Federal Reserve’s interest-rate hikes. They pocketed an 18% return over the past five years, more than triple the average return generated in a gauge of emerging-market bonds, according to data compiled by Bloomberg.

Pemex “is absolutely a source of pride and nationalism for the entire country,” says Jennifer Gorgoll, an Atlanta-based portfolio manager at Neuberger Berman Group LLC. 

Gorgoll is a long-standing member of the bull camp, alongside investors at firms such as EMSO Asset Management. She first started buying Pemex bonds 20 years ago. To her, it’s inconceivable that policymakers walk away from the company. “The Mexican government’s support for Pemex is unwavering.” 

But inherent is the risk, as pointed out by Moody’s senior analyst Roxana Munoz earlier this month, that Pemex would be edging toward default if not for the government’s support. 

Pemex’s debt burden lingers around $106 billion, with a network of aging infrastructure and stagnating oil output. In a two-notch downgrade to B3 — which puts Pemex seven levels lower than Mexico — Munoz cited the risk that bailout costs get so high that officials pull back on support and the company reneges on its debt. Whether that’s done via debt exchanges, repurchases or other transactions that “reduce debt at a substantial discount to par,” Moody’s said it would call it a default.

A spokesperson for Moody’s declined to comment on Romero’s remarks.

Read More: Latin America’s Quasi-Sovereign Companies Attract Bond Investors

On Wall Street, though, investors’ trust in government support has fueled rallies in so-called quasi-sovereign bonds across Latin America. Notes from Petroleos de Peru SA and Chile’s Codelco are among those that have outperformed a broader gauge of emerging-market credits in recent months, according to data compiled by Bloomberg. 

The Mexican government’s assistance, in particular, has helped the risk premium on Pemex notes due in 2030 over similar-maturity sovereign bonds shrink to about 4.6 percentage points from 6 percentage points in November, the data show.

Even this year’s presidential election is seen as little reason to fret among the bulls, who are convinced that Andres Manuel Lopez Obrador’s successor — whether it’s frontrunner Claudia Sheinbaum or an opponent — will keep doling out cash. 

Since late last year, the government has earmarked $8.5 billion in its budget for the company, lowered Pemex’s profit-sharing duties and granted billions of dollars in forgiveness of those duties. Pemex’s fourth-quarter profit came alongside a massive decrease in taxes.

In an interview with El Pais, Deputy Finance Minister Gabriel Yorio said he was unconcerned about Mexico’s public deficit and that relief granted to Pemex doesn’t compromise public spending.

“It seems like AMLO 2.0 is the way to think of most political issues — and Pemex specifically,” said Sergey Goncharov, a money manager at Vontobel Asset Management. “Mexico, as a country, is not on the brink of any major cliff fiscally or macro-economically.”

That turns short-dated bonds into a sweet spot for money managers who are certain the next administration will carry on the support, even if the company’s longer-term health is less clear, said George Ordonez, a strategist at Banco Bilbao Vizcaya Argentaria.

Goldman Sachs Group Inc. strategists including Sara Grut have also touted notes due in one to three years.

“Discussions are being held on how to further support Pemex both in the short-term and the long-term,” said Andrew De Luca, an emerging-market credit analyst at T. Rowe Price. Those talks stand to yield measures like “more cash injections or greater reductions in taxes, among others.”

--With assistance from Vinícius Andrade and Carolina Wilson.

(Updates with deputy finance minister comment in 17th paragraph.)

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