Moody’s rates Pemex notes Baa3

Moody's Investors Service said it assigned a Baa3 senior unsecured rating to Petroleos Mexicanos (Pemex)'s $1.5 billion 5 3/8% notes due 2022, $1 billion floating-rate notes due 2022 and $3 billion 6½% notes due 2027.

The proceeds will be used for general corporate purposes, including liability management and capital investment, Moody’s said.

The outlook is negative.

The notes were issued by Pemex and will be jointly and severally guaranteed by the company's subsidiaries, namely Pemex Exploracion y Produccion, Pemex Transformacion Industrial, Pemex Perforacion y Servicios, Pemex Logística and Pemex Cogeneracion y Servicios.

The ratings are based on the company's B3 baseline credit assessment, which is dictated by its standalone credit strength, Moody’s said, and considers the company's large proved hydrocarbon reserves.

The ratings also consider its dominant role and integrated operations in the energy industry in Mexico, the agency said, and its position as a major crude oil exporter to the United States.

But the ratings are increasingly affected by its heavy tax burden, weak cash flow and high financial leverage, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.