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Pemex and Mexican Finance Ministry to Work on Repaying Debts Owed to Suppliers
November 27, 2024
Pemex’s CEO Victor Rodriguez revealed that Mexico’s Finance Ministry is preparing to collaborate with a consortium of banks to help the state-owned oil company manage its debts owed to suppliers. He stated that while Pemex has a debt ceiling, it cannot use it due to high costs. Thus, as analysts note, Pemex’s backlog of payments to suppliers which exceeds $20bn (as per some estimates) may be cleared and be borne by the sovereign’s balance sheet. This will be in addition to the MXN 136bn ($6.7bn) budgetary support via a cash transfer from the government that Pemex will receive for 2025. Pemex has already paid $13.2bn to suppliers this year. Pemex’s total debt burden amounts to about $100bn, with about $9bn due next year and $13bn in 2026. Bloomberg notes that in previous years, Pemex received financing from banks like Citigroup and Deutsche Bank, who have supported its debt obligations through credit-default swaps. The new strategy thus aims to stabilize Pemex’s finances and reduce its outstanding obligations, benefiting both the company and its service providers.
Pemex’s dollar bonds have been trading with a positive bias over the last week – its 5.95% 2031s are trading at 86.1 cents on the dollar, yielding 8.94%.
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