S&P rates Pemex notes BBB+

S&P said it assigned its BBB+ issue-level ratings on Pemex (Petroleos Mexicanos)' (foreign currency: BBB+/negative/--; local currency: A/negative/--) €1.75 billion 2½% senior unsecured notes due 2021, €1.25 billion 3¾% senior unsecured notes due 2024 and €1.25 billion 4 7/8% senior unsecured notes due 2028.

The company will use proceeds to finance its investment program and for debt repayment.

The notes benefit from the guarantees of Pemex Exploracion y Produccion, Pemex Cogeneracion y Servicios, Pemex Perforacion y Servicios, Pemex Logistica, and Pemex Transformacion Industrial, which also currently guarantee all of Pemex's outstanding notes.

Pemex’s foreign currency ratings are the same as the sovereign foreign currency rating on Mexico, based on the agency’s assessment of the government's almost certain likelihood of extraordinary support to the company.

S&P said it also assesses Pemex's stand-alone credit profile as bb, reflecting the company's solid position in the global oil market, average crude production of 2,182 million barrels per day (bpd) as of Sept. 30, 2016, as well as its proven reserves of 8.1 years.

The ratings also reflect the company's weak after-tax financial performance, as seen in the expected debt to EBITDA of 4.5 times to 5 times and funds from operations to debt of 3.5% to 4% in 2017, the agency added.

© 2015 Prospect News.
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