S&P gives BBB to Pemex notes

Standard & Poor's said it assigned its BBB rating to Pemex Project Funding Master Trust's $1 billion 5.75% notes due 2015, its $500 million 6.625% bonds due 2035 and its €1 billion 5.50% notes due 2025.

Proceeds will be used to finance the investment program of its parent company, Petroleos Mexicanos (A-/stable), the agency said.

The outlook is stable.

The rating reflects the BBB foreign currency rating of the parent company, linked because of the government's ownership of the company, S&P said, adding that Pemex enjoys an above-average business position with commodity price volatility and government interference representing the primary risks to its business, S&P noted.

This risk, though, is mitigated by its extensive, proved developed reserve base of 17.6 billion barrels of oil, the agency added.

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