Fitch Affirms PEMEX Finance Ltd. at 'A+'; Outlook Stable

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings affirms the ratings assigned to the outstanding series issued by PEMEX Finance Ltd. as follows:

--Series 1998 9.15% notes due 2018 at 'A+'; Outlook Stable;

--Series 1999 10.61% notes due 2017 at 'A+; Outlook Stable.

PEMEX Finance Ltd. is a Cayman Islands special purpose company wholly owned by Petroleos Mexicanos S.A. de C.V. (Pemex). The future flow program is backed by receivables generated by the sale of Maya crude to designated U.S., Canadian and Aruban customers.

KEY RATING DRIVERS

Credit Quality of Pemex: On May 7, 2015, Fitch affirmed Pemex's foreign currency (FC) and local currency (LC) Issuer Default Ratings (IDRs) at 'BBB+' and 'A-', respectively. The Rating Outlook is Stable. While performance risk related to the originator and the securitized business line does not constrain the current rating of the transaction, Fitch tempers the notching uplift of future flow ratings for highly rated originators.

Small Size of Future Flow Program: The outstanding balance of the program is $275 million, which represents less than 1% of PEMEX's total liabilities. The longstanding program is scheduled to fully amortize in November 2018.

High Albeit Reduced DSCRs: The future flow program continues to benefit from high debt service coverage ratios (averaging 76.8x in 2015) despite a collapse in Maya crude oil prices and a reduction in production levels.

Sovereign Stability: On July 31, 2015, Fitch affirmed Mexico's Long-term FC and LC IDRs at 'BBB+' and 'A-', respectively, and the Country Ceiling at 'A'. The Outlook is Stable.

RATING SENSITIVITIES

The ratings assigned to the notes are sensitive to changes in the credit quality of Pemex as well as to sustained severe reductions in program collections.

DUE DILIGENCE USAGE

No third-party due diligence was provided to or reviewed by Fitch in relation to this rating action.

Additional information is available at www.fitchratings.com.

Sources of Information:

In addition to the source(s) of information identified in the master criteria, this action was additionally informed by information from Pemex.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Future Flow Securitization Rating Criteria (pub. 12 Aug 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868191

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=997043

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997043

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151218005631/en/

Fitch Ratings
Primary Analyst
Gregory Lane
Director
+1 312-606-2304
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Committee Chairperson
Greg Kabance
Managing Director
+1 312-368-2052
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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