S&P rates Pemex notes A

Standard & Poor’s said it assigned an A local-currency rating and mxAAA national scale rating to Petroleos Mexicanos SAB de CV’s (Pemex) proposed Ps.7.5 billion senior unsecured variable-rate Pemex 16 notes due 2019.

The proceeds will be used for capital expenditures and debt refinancing.

The notes benefit from an irrevocable and unconditional payment guarantee from the company’s productive state-owned subsidiaries, Pemex Exploracion y Produccion, Pemex Transformacion Industrial, Pemex Cogeneracion y Servicios, Pemex Perforacion y Servicios and Pemex Logistica, all of which guarantee Pemex’s outstanding notes.

The ratings on the notes are based on the ratings on Pemex, S&P said.

The ratings also consider an expectation of an almost certain likelihood of extraordinary government support, the agency said, due to its critical role as the country’s dominant oil exploration and production company.

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