S&P: Pemex notes, add-on BBB+

Standard & Poor’s said it affirmed the BBB+ foreign-currency and A local-currency global scale of Petroleos Mexicanos (Pemex), along with its mxAAA/mxA-1+ national scale ratings.

The agency also said it affirmed the BBB+ foreign-currency and A local-currency global scale ratings on its subsidiaries, P.M.I. Trading Ltd., PMI Norteamerica SA de CV and Mex Gas Supply, SL.

S&P also said it assigned a BBB+ rating to Pemex’s proposed $1 billion 4¼% senior unsecured notes due 2025.

The existing BBB+ rating on the company’s $2.75 billion 5½% senior unsecured notes due 2044 is unchanged after a $1.5 billion add-on, the agency said.

All of Pemex’s notes benefit from the irrevocable and unconditional payment guarantee of Pemex Exploracion y Produccion, Pemex-Refinacion and Pemex-Gas y Petroquimica Basica.

These three entities are Pemex’s subsidiaries.

The proceeds from the add-on will be used to finance capital investments and working capital needs, S&P said, and to redeem bonds due 2015.

The ratings reflect the company’s BBB- stand-alone credit profile and the almost certain likelihood that the Mexican government would provide timely and sufficient extraordinary support to Pemex in the event of financial distress, the agency said.

The ratings continue to mirror that of the sovereign, assuming no changes in the current assessment of the company’s role and link with the Mexican government, S&P added.

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