Fitch rates Pemex notes BBB+

Fitch Ratings said it assigned a BBB+ long-term rating to Petroleos Mexicanos SAB de CV’s (Pemex) €2.25 billion senior unsecured debt issuance composed of a €1.35 billion issue due in three years and €900 million issue due in seven years.

The company has a long-term issuer default rating of BBB+, local-currency long-term issuer default rating of A-, national long-term rating of AAA(mex) and national short-term rating of F1+(mex), along with a BBB+ rating on its notes outstanding in foreign currency, A- rating on its notes outstanding in local currency and AAA(mex) rating on its national scale debt issuances.

The proceeds will be used to finance the company’s investment program and working capital needs and refinance debt, Fitch said.

The debt issuances are guaranteed by Pemex Exploracion y Produccion, Pemex Transformacion Industrial, Pemex Perforacion y Servicios, Pemex Logistica and Pemex Cogeneracion y Servicios, the agency said.

The ratings reflect the company’s close linkage to the government of Mexico and the company's fiscal importance to the sovereign, Fitch said.

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

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

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