Fitch rates Pemex notes BBB-

Fitch Ratings said it assigned a foreign currency rating of BBB- to two new tranches of notes issued by Pemex Project Funding Master Trust and unconditionally guaranteed by Mexico's state-owned Petroleos Mexicanos (Pemex). The ratings apply to the $500 million 6.625% notes due 2035 and the $1 billion 5.75% notes due 2015.

The outlook is stable.

Proceeds will be used to finance and refinance long-term productive infrastructure projects (Pidiregas), including a make-whole premium relating to the call of certain Pemex Finance bonds.

Fitch said Pemex's ratings are supported by a strong pretax financial profile, sizable proven hydrocarbon reserves, an export-oriented profile, an attractive upstream cost structure, its fiscal importance to the sovereign, and a dominant domestic market position.

These strengths are tempered, Fitch said, by vulnerability to fluctuations in international commodity prices, its substantial tax burden, imminent negative net worth position, large capital investment requirements, and exposure to political interference risk.

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