Moody’s applies A3 to Pemex notes

Moody's Investors Service said it assigned an A3 global local currency rating to Petroleos Mexicanos' (Pemex) upcoming issuances of $1.5 billion 3˝% senior unsecured notes due 2020, $1.5 billion 4˝% senior unsecured notes due 2026 and $3 billion 5 5/8% senior unsecured notes due 2046.

The outlook is stable.

Proceeds will be used to finance capital investments.

Moody’s said the ratings are based on its view that despite the significant changes arising from the new energy law, Pemex will remain closely linked to the government of Mexico, which will continue to provide strong support, given the company's importance to the government's budget, to the oil sector and to the country's exports.

In the short- to medium-term, Moody's does not expect any material reduction in Pemex's tax burden and its debt amount is likely to rise to fund higher capital expenditures. However, its managerial and budgetary autonomy will increase, improving its efficiency, the agency said.

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