TEXT: S&P Affirms PMI Trading 'BBB' Foreign, 'A-' Local Currency Ratings

(The following was released by the rating agency)

-- PMI, an indirect wholly owned subsidiary of PEMEX, acts as PEMEX's trading arm for petrochemical and refined purchases and sales internationally.

-- We view PMI's operations as an integrated business with PEMEX, given the latter's ownership and status as most important client to PMI's subsidiaries.

-- We are affirming our 'BBB' and 'A-' foreign and local currency corporate credit ratings on PMI, mirroring those on PEMEX.

-- The stable outlook reflects our belief that PMI will continue to operate as an integrated business with PEMEX.

MEXICO CITY (Standard & Poor's) Nov. 10, 2011--Standard & Poor's Ratings Services said today that it affirmed its 'BBB' foreign currency and 'A-' local currency corporate credit ratings on P.M.I. Trading Ltd (PMI). The outlook is stable.

"Our ratings on PMI are based on our view of the company as integrated with PEMEX," said Standard & Poor's credit analyst Fabiola Ortiz.

Petroleos Mexicanos (PEMEX; foreign currency: BBB/Stable/--; local currency: A-/Stable/--) is the Mexico-based, government-owned oil company. The ratings are supported by PMI's indirect full ownership by PEMEX.

Moreover, Pemex Refinacion and PEMEX Gas y Petroquimica Basica (PGPB) are PMI's main clients, and its operations follow PEMEX's operating needs; it has aligned its risk management policies and practices with those of PEMEX; and PEMEX could fully back PMI's funding requirements if necessary.

PEMEX directly owns 48.50% of PMI. PMI Holdings Petroleos Espana S.L. (not rated) owns 50.5%, and PMI Norteamerica S.A. de C.V. (foreign currency: BBB/Stable/--; local currency: A-/Stable/--) owns 1%. PEMEX also controls these two entities. Moreover, PMI's financial results are consolidated into PEMEX's financial statements.

PMI is the commercial arm of PEMEX in the international energy market, managing PEMEX's imports and exports of refined and petrochemical products. It is mostly dedicated to attending to PEMEX's needs as its only client.

Although PMI has implemented its own policies for risk management, with experienced personnel that interacts regularly with senior management and the board of directors of PEMEX, it conducts its operations under detailed policies aligned with PEMEX's risk management practices.

The stable outlook reflects our belief that PMI will continue to operate as an integrated business within PEMEX.

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-- Parent/Subsidiary Links; General Principles; Subsidiaries/Joint Ventures/Nonrecourse Projects; Finance Subsidiaries; Rating Link to Parent, Oct. 28, 2004