S&P: Pemex unchanged

Standard & Poor's said that Petroleos Mexicanos' (Pemex, local currency: A-/stable, foreign currency: BBB/stable) announcement that its 2005 audited financial statements will show negative shareholders' equity has no impact on the issuer's rating and outlook.

The agency said the announcement is not an unexpected development, given that the issuer's shareholders equity under U.S. GAAP has been negative in previous years, most recently in 2003.

Also, the announcement underscores S&P's concerns regarding the increase in Pemex's exposure to commodity price volatility as a result of the continued increase in the issuer's debt burden and pension liabilities.

The agency noted that its ratings on Pemex are predicated on the opinion that Pemex's willingness to meet its financial obligations is determined by the United Mexican States.

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