PEMEX: Pemex performs successful refinancing operation of its debt for 5,000 million dollars

Pemex issued the following announcement on Jan. 21.

Today, Petróleos Mexicanos (Pemex) carried out a debt refinancing operation with the placement in the international capital markets of two reference bonds at 11 and 40 years respectively, for a total amount of 5 billion dollars.

It is worth mentioning that for the first time, Pemex manages to place a 40-year issue, exceeding the maximum terms of 30 years that it had been achieving in international markets. Reflecting with this , Pemex's broad access to financial markets, as well as investor confidence in the operational and financial strategy of the current administration.

For this operation , there was the participation of investors from the United States, Europe and Latin America mainly, with a demand close to 26 billion dollars, equivalent to 5.2 times the total amount issued.

During the execution of the operation and thanks to the high demand received, it was possible to reduce the financing cost announced at the beginning of it. The final result of the issuance allowed yields to be obtained below the current funding references for Pemex.

Thus, Pemex placed a new issue of an 11-year bond with a yield of 5.95% and a 40-year bond with a yield of 6.95%. These price levels were below the also successful operation in September last year, when the 10-year bond was placed with a yield of 6.85% and in the case of the 30-year bond with a yield of 7.7 %, which is a clear sign of the decrease in risk perception and a lower financial cost for the company.

It is worth remembering that at the end of the previous administration, the funding rate of Pemex in the international market was around 8% for a 10-year issue. Thus, in just one year the company manages to reduce its funding rate in the international market by just over 2 percentage points.

Along with this operation, the company announced a liability management exercise aimed at improving the debt amortization profile, so that part of the resources from the issuance will be used for the repurchase of bonds maturing in 2020 called in dollars. The rest of the resources will be used for refinancing purposes of the company.

The placing agents were the financial institutions Barclays, BBVA, BNP Paribas, JP Morgan, Morgan Stanley, MUFG, Scotiabank and SMBC.

It is relevant to mention that this operation does not increase the balance of Pemex's debt, that is, it is a refinancing operation of this year's maturities, reiterating with it the commitment to continue, for the second consecutive year, without increasing the company debt.

Finally, Petróleos Mexicanos agr adece to the financial institutions that accompanied it in the placement, as well as to the investors that participated.

Original source can be found here.