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Bond Market News
Pemex Receives $3.8bn from Government to Meet Debt Obligations; Plans Comeback to Bond Markets
July 31, 2023
Pemex received MXN 64.9bn ($3.8bn) from the government in order to meet its obligations, as per a local stock exchange filing. The company’s CFO said that they are evaluating whether Pemex would want to tap bond markets in 2023 or 2024 without providing details on use of funds from the issuance. Pemex is also renewing revolving credit lines with banks. The support from the government comes just days after the Mexican President AMLO said, “Pemex isn’t a private company. It’s connected to the nation” adding that the state-owned company should not have to pay more than Mexico to issue debt, adding they are “the same”. Pemex’s CEO Octavio Romero earlier last week hinted that it would be prudent that the government refinance Pemex’s debt since it is a cheaper alternative to the company refinancing by itself in the markets. The CFOs recent comments on planning to tap bond markets sounds contrary to the CEO’s comments last week especially if the proceeds are used for refinancing. Pemex last came to the dollar bond markets in early-February raising $2bn via a 10Y bond at a yield of 10.375%
Pemex’s dollar bonds continued to trade higher with its 5.35% 2028s up 1.6 points to 82.6, yielding 10.25%.
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