S&P rates Pemex notes BBB+

Standard & Poor's said it assigned a BBB+ rating to Petroleos Mexicanos' (Pemex) proposed $500 million 3 1/8% senior unsecured notes due 2019 and $3.0 billion 6 3/8% senior unsecured notes due 2045.

The existing BBB+ debt rating on the company's $1 billion 4 7/8% notes due 2024 is unchanged after the $500 million add-on. This add-on increased the issue's outstanding balance to $1.5 billion, S&P said.

The proceeds will be used for general corporate purposes, including capital expenditures and refinancing activities, the agency said.

All of these notes benefit from irrevocable and unconditional payment guarantees from Pemex Exploracion y Produccion, Pemex-Refinacion and Pemex-Gas y Petroquimica Basica. These three entities are Pemex's subsidiaries.

The BBB+ foreign-currency corporate credit rating on Pemex and the proposed notes are the same as the sovereign foreign-currency rating based on an assessment of an almost certain likelihood of extraordinary support from the Mexican government, S&P said.

Pemex has a stand-alone credit profile of BBB-, reflecting the company's satisfactory business risk profile given its monopoly status in the large national oil and gas market, the agency said.

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