S&P rates Pemex notes BBB+

Standard & Poor’s said it assigned a BBB+ rating to Petroleos Mexicanos SAB de CV’s (Pemex) CHF 600 million 1½% senior unsecured notes due 2020.

The proceeds will be used to finance the company’s investment program and for debt refinancing.

The notes benefit from an irrevocable and unconditional payment guarantee from the company’s subsidiaries: Pemex Exploracion y Produccion, Pemex Cogeneracion y Servicios, Pemex Perforacion y Servicios, Pemex Logistica and Pemex Transformacion Industrial, which are the same companies that now guarantee all of Pemex’s outstanding notes, S&P said.

The foreign-currency ratings on the company are the same as the sovereign foreign-currency rating on Mexico due to the government’s almost certain likelihood of extraordinary support to the company, if needed, the agency said.

PEMEX has a stand-alone credit profile of BB+, reflecting the company’s dominant position in Mexico’s large national oil and gas market, extensive oil and gas reserve base and important role in Mexico’s energy sector, S&P said.

The ratings also consider the company’s weak after-tax financial performance and aggressive capital expenditures program, the agency said.

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