Moody’s rates Pemex notes Baa3

Moody's Investors Service said it assigned a Baa3 senior unsecured rating to Pemex (Petroleos Mexicanos)'s CHF 375 million of notes (about $380 million), divided in two tranches: CHF 150 million 2 3/8% due 2021 and CHF 225 million 1˝% due 2018.

The outlook is negative.

Proceeds will be used to finance capital investments and for general corporate purposes.

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

Moody’s said the Baa3 ratings reflect its joint-default analysis, which includes the agency's assumption that there is: (a) A very high likelihood of extraordinary support from the government of Mexico (A3 negative) to avoid default; and (b) a very high default correlation between Pemex and the government.

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