By issuing US$500 million of BBBrated future exports-backed securities through an offshore special purpose vehicle

(SPV), Pemex was able to lower its cost of debt by 337.

5 basis points as compared to direct unsecured international debt financing.

a. Why are Pemex’s exports-backed securities rated BBB when Pemex’s international credit rating is a lower single B?

b. Explain why securitization of its future oil exports receivables can help Pemex lower its cost of international debt.

c. What are the assets being securitized? What is the role played by the SPV?

d. What is/are the risk(s) faced by investors purchasing Pemex’s future exportsbacked securities?