Fitch applies BBB+ to Pemex bond

Fitch Ratings said it assigned a BBB+ long-term rating to Petroleos Mexicanos' (Pemex) $4 billion bond issuance due 2023 and 2047.

Pemex expects to use the proceeds to refinance upcoming maturities, fund capex and for general corporate purposes.

Fitch said the ratings reflect Pemex's close linkage to the government of Mexico and the company's fiscal importance to the sovereign and strategic importance to the country.

The ratings also reflect the company's competitive pre-tax cost structure, national and export-oriented profile, sizable hydrocarbon reserves and its strong domestic market position.

The ratings are constrained by Pemex's substantial tax burden, significant unfunded pension liabilities, large capital investment requirements, negative equity and exposure to political interference risk, the agency added.

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