S&P: Pemex unchanged after add-on

Standard & Poor's said the A- local-currency and mxAAA national scale ratings on Petroleos Mexicanos's (Pemex) existing Ps. 15 billion fixed-rate notes due 2024 (Pemex 13-2) and its mxAAA national scale rating on Pemex's existing Ps. 5 billion variable-rate notes due 2019 (Pemex 13) remain unchanged after a Ps. 15 billion add-on.

International investors may acquire 90% of the Pemex 13-2 notes through global depository notes, S&P said.

Therefore, the A- local currency rating on the notes addresses the payment risk associated with Pemex's payment obligations on the underlying debt certificates (cebures).

The agency said it rated the notes at the same level as the local-currency rating on Pemex based on a belief that the company's promise of payment is identical to that for domestic cebures holders.

Therefore, the rating on the notes addresses the underlying local-currency obligation, S&P said.

Both instruments were issued under the company's current Ps. 300 billion medium-term notes program. The company will use the proceeds for capital expenditures and debt refinancing.

The bonds benefit from an irrevocable and unconditional payment guarantee from Pemex's subsidiary entities - Pemex Exploracion y Produccion, Pemex-Refinacion and Pemex-Gas y Petroquimica Basica, the agency said.

The assessment was based on the company's BBB- stand-alone credit profile and an almost certain likelihood of extraordinary support from the Mexican government, S&P said.

The ratings also reflect its monopoly status in the large national oil and gas market, substantial oil and gas reserve base and central role in Mexico's energy sector, the agency said.

The ratings also consider its significant financial risk assessment based on its weak after-tax financial performance and aggressive capital expenditures program, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.