While Pemex's securitizations are booming the outlook for the other Latin oil conglomerate active in the international securitization markets, Petroleos de Venezuela (PDVSA), is not as bright.

Early this month, Moody's Investors Service lowered the senior unsecured debt rating of the company's PDVSA Finance Ltd future flow program from A3 to Baa1 citing the potential for increasing intervention by president Hugo Chavez's government.

"We had the notes under review since September of 1999, [and] decided on the downgrade after we met with Venezuelan government representatives and assessed PDVSA's 2000 outlook," said Thomas S. Coleman, senior vice president at Moody's.

Concerns regarding Chavez's political agenda and its influence on the company had already given pause for thought at other rating agencies.

Duff & Phelps Credit Rating Co. downgraded PDVSA Finance from A to A-minus in December last year and then to BBB-plus in January.

Fitch IBCA also gave the transactions an initial A-rating but has yet to decide on a downgrade.

"We have the notes on negative outlook and expect to make a decision in the next month," said Gabriel Torres, analyst with Fitch in New York. "We understand why other agencies downgraded the notes but we feel that PDVSA has been historically very resilient to the numerous financial crises that affected Venezuela. This is even more true of PDVSA Finance because the cash flows go into an offshore trust, minimizing any government intervention."

One investor commented: "I think that Duff had the right call early on and that both Moody's and Fitch feel uncomfortable with the rating they assigned to PDVSA Finance given the amount of political volatility in Venezuela today.

"It will not surprise me if Fitch followed suit and all three agencies would be in alignment. Investment bankers and PDVSA officers were very convincing in getting a single A-minus out of the box but they just couldn't make it stick."

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