S&P rates Pemex notes BBB+

S&P said it assigned BBB+ ratings to Pemex (Petroleos Mexicanos SAB de CV)’s $3 billion 6˝% senior unsecured notes due 2027, $1.5 billion 5 3/8% senior unsecured notes due 2022 and $1 billion floating-rate notes senior unsecured notes due 2022.

The proceeds will be used to finance the company’s investment program, S&P said.

The notes benefit from the guarantees of Pemex Exploracion y Produccion, Pemex Cogeneracion y Servicios, Pemex Perforacion y Servicios, Pemex Logistica and Pemex Transformacion Industrial, which also currently guarantee all of Pemex’s outstanding notes, the agency said.

The company’s foreign-currency ratings are the same as the sovereign foreign-currency rating on Mexico because of the government's almost certain likelihood of extraordinary support to the company, S&P said.

Pemex’s stand-alone credit profile is assessed as BB, reflecting the company's solid position in the global oil market, average crude production of 2,182 million barrels per day as of Sept. 30, 2016, as well as its proven reserves of 8.1 years, the agency added.

The ratings also consider the company's weak after-tax financial performance as seen in the expected debt-to-EBITDA ratio of 4.5x to 5x in the next two years, S&P said.

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