S&P gives Pemex notes BBB+

Standard & Poor's said it assigned its BBB+ ratings to Petroleos Mexicanos' (Pemex) upcoming €1 billion 1 7/8% senior unsecured notes due 2022 and €1.25 billion 2¾% senior unsecured notes due 2027.

Proceeds will be used to finance the company’s investment program and debt refinancing.

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

S&P said its foreign currency ratings on the company are the same as the sovereign foreign currency rating, based on its assessment of the Mexican government's "almost certain" likelihood of extraordinary support to the company. The agency also assesses Pemex's stand-alone credit profile as bbb-, reflecting the company's dominant position in Mexico's large national oil and gas market, extensive oil and gas reserve base and its important role in Mexico's energy sector.

The ratings also reflect the company's weak after-tax financial performance and aggressive capital expenditures program, S&P said.

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