Fitch rates Pemex trust notes BBB

Fitch Ratings said it assigned a BBB rating to new notes issued by the Pemex Project Funding Master Trust and unconditionally guaranteed by Petroleos Mexicanos (Pemex). The ratings apply to the reopening of the 5¾% 2018 notes for $1 billion and $500 million of 6 5/8% bonds due 2038.

The ratings are placed on positive Rating Watch.

Proceeds will be used for infrastructure projects.

The agency said that as a state-owned oil company, Pemex's foreign-currency rating remains highly linked with the sovereign. Since 2005, Fitch has rated Pemex one notch lower than the United Mexican States due to the government's fiscal regime, which virtually stripped away all of the Pemex's free cash flow and resulted in the steady erosion of Pemex's equity capital and required Pemex to fund its large and growing capital investment program with debt.

The positive Rating Watch reflects the possibility that the most recent fiscal regime that was passed in 2007, along with prior tax reform passed in 2006, could slow the growth in Pemex's debt level as it copes with challenges related to production declines, Fitch 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.