S&P rates Pemex notes A-

Standard & Poor's said it assigned an A- local-currency and mxAAA national scale ratings to Petroleos Mexicanos' (Pemex) proposed Ps. 15 billion fixed-rate notes due 2024.

The company's mxAAA national scale rating on Pemex's existing notes remained unchanged following the new conditions on the debt, S&P said.

The A- local-currency rating on the notes addresses the payment risk associated with Pemex's payment obligations on the underlying cebures, the agency said. The notes are rated at the same level as the company's local-currency rating based on a belief that the company's promise of payment is identical to that for domestic holders of the cebures.

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

The proceeds will be used for capital expenditures and debt refinancing. Pemex's subsidiaries, Pemex Exploracion y Produccion, Pemex-Refinacion and Pemex-Gas y Petroquimica Basica, irrevocably and unconditionally guarantee these notes.

The ratings are based the company's critical role as the only oil exploration and production company operating in Mexico, S&P said. It provides about 40% of Mexico's public-sector revenues through taxes and duties, the agency said, and is integrally linked with the government.

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