Moody’s assigns Baa3 to Pemex notes

Moody's Investors Service said it assigned a Baa3 senior unsecured rating to Pemex (Petroleos Mexicanos)'s $2.1 billion notes due 2023 and $3.5 billion notes due 2047.

About $3.1 billion will be used to tender notes maturing in 2018 and 2019 and to exchange notes maturing in 2044. Another $2.5 billion will fund the company's 2017 capital investments.

The outlook is negative.

The notes were issued by Pemex and will be jointly and severally guaranteed by the company'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 are based on Pemex’s b3 baseline credit assessment (BCA), which indicates the agency’s view of its standalone credit strength, and considers the company's large proved hydrocarbon reserves, which in 2015 amounted to 9,632 million boe, equivalent to 8.1 years of life, as per Pemex; oil production averaging 2,237 mbd for the last 12 months ended June 30; a dominant role and integrated operations in the energy industry in Mexico; and its position as a major crude oil exporter to the U.S.

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