S&P assigns BBB to Pemex notes

S&P said it assigned its BBB issue-level rating to Petroleos Mexicanos' (Pemex) $2 billion in senior unsecured notes due 2033, issued under a $125 billion medium-term notes program, series C.

The notes will be jointly and severally guaranteed by Pemex Exploracion y Produccion, Pemex Transformacion Industrial, and Pemex Logistica, all of which also guarantee Pemex's outstanding notes.

“The ratings on Pemex reflect its relationship with its controlling shareholder–the Mexican government-and the latter's incentives, capacity, and tools to support the company. We expect an almost certain likelihood that the government would provide timely and sufficient extraordinary support to Pemex in the event of distress.

Pemex plans to use the proceeds to refinance debt and for general corporate purposes.

The outlook is stable.

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