S&P lifts CFE, Pemex views to stable

S&P said it revised the outlook on government-related entities Comision Federal De Electricidad (CFE) and Petroleos Mexicanos (Pemex) to stable and negative.

The agency also said it revised the outlook to stable on Pemex's subsidiaries, P.M.I. Trading Ltd., PMI NASA and Mex Gas Supply, SL.

S&P also said it affirmed the BBB+ foreign-currency ratings and A local-currency ratings and issue-level ratings on both companies.

The outlook revision follows a similar rating action on Mexico, the agency explained.

The ratings and outlook on Pemex and CFE reflect a view that there is an almost certain likelihood of extraordinary support from the government to both issuers in case of financial distress, Moody's said.

The agency said it believes that Pemex plays a critical role for Mexico because it provides about 16% of Mexico's public sector revenues through taxes and duties.

It also has an integral link to the government, given the latter's full ownership of the company, Moody's added.

The ratings on PMI Trading, PMI NASA and Mex Gas Supply mirror the ratings on Pemex given that they are considered core subsidiaries and that they would benefit indirectly from the Mexican government's potential extraordinary support to Pemex, the agency added.

CFE also plays a critical role for the government, given its monopoly over the transmission and distribution of electricity in the country, Moody's said.

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