Fitch Rates Pemex's 2018 US$1B & 2038 US$500MM Bond Issuance 'BBB'

CHICAGO--(Business Wire)--
Fitch Ratings has assigned a 'BBB' rating to new notes issued by
the PEMEX Project Funding Master Trust, and unconditionally guaranteed
by Mexico's state-owned Petroleos Mexicanos (PEMEX). The ratings apply
to the re-opening of the 5.75% 2018 Notes for US$1 billion and US$500
million of 6.625% bonds due 2038. The 2018 Notes will be consolidated
to form a single series with the outstanding 2018 Notes originally
issued on Oct. 22, 2007 and will now total US$2.5 billion. Proceeds
will be used for infrastructure projects. The ratings are placed on
Positive Rating Watch.

As a state-owned oil company, PEMEX's foreign currency rating
remains highly linked with the sovereign. Since 2005, Fitch has rated
PEMEX one notch lower than the United Mexican States (UMS). The
notching between the rating of PEMEX and the UMS was incorporated due
to the government's fiscal regime which virtually stripped away all of
the PEMEX's free cash flow and resulted in the steady erosion of
PEMEX's equity capital and required PEMEX to fund its large and
growing capital investment program with debt. The company's debt
increased to MXP537 billion at the end of 2005 from MXP219 billion at
the end of 2001 and net worth declined to MXP27 billion from MXP123
billion. PEMEX's debt is not guaranteed by the government.

The Positive Rating Watch reflects the possibility that the most
recent fiscal regime that was passed in 2007, along with prior tax
reform passed in 2006, could slow the growth in PEMEX's debt level as
it copes with challenges related to production declines. The Rating
Watch is likely to be resolved after a full review of the results of
these financial consequences on PEMEX. Continued rapid growth of the
debt levels at PEMEX, and absent further expected fiscal reforms at
UMS would likely lead to the maintenance of the existing ratings.

For more information on Fitch's upgrade of PEMEX and PEMEX Project
Funding Master Trust, please see the Sept. 21, 2007 press release
titled 'Fitch Ratings Upgrades PEMEX and Related Entities; Rating
Watch Positive', available on the Fitch Ratings web site
www.fitchratings.com. For more information on Fitch's upgrade of UMS,
please see the Sept. 19, 2007 press release titled 'Fitch Ratings
Upgrades Mexico to 'BBB+',' available also available at
www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Gianna Bern, +1-312-368-3217 (Chicago)
Roberto Guerra, +52-81-8335-7179 (Monterrey)
Media Relations:
Christopher Kimble, +1-212-908-0226 (New York)

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