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Pemex Reports First Quarterly Profit In a Year; Mexico Raises $12bn
July 29, 2025
Pemex delivered its first quarterly profit in over a year, reporting a net income of MXN 59.52bn ($3.2bn) in Q2. This marked a sharp reversal from the steep MXN 273.3bn ($14.56bn) loss seen duing the same period last year. Besides, it also saw a reversal from the MXN 43.3bn ($2.3bn) net loss observed in Q1. Its results were boosted thanks to a strong peso during the quarter (up ~8%), alongside lower cost of sales and strong performance among some financial assets. Pemex has already paid off MXN 230bn ($12.3bn) to service providers in 1H2025, and is seeking solutions to pay back $20bn to oilfield contractors without hampering daily production. Recently, Pemex joined hands with Mexican billionaire Carlos Slim’s Grupo Carso SAB and Australia’s Woodside Energy Group to develop offshore gas assets, besides also opening some key oil and gas fields to private sector for increased production.
In related news, Mexico raised $12bn via a 5Y bond at a yield of 5.579%, 30bp inside initial guidance of T+200bp area. The Pre-Capitalized Securities (P-Caps) are rated Baa2/BBB. The issuer is Eagle Funding LuxCo S.à r.l., acting in respect of EFL Compartment I (EFL I). The notes are amortizing in nature. Approximately 14.0% of issuance size will be amortized in August 2027, 43.5% in August 2028, 14.0% in August 2029, and 28.5% in August 2030. By nature of these notes, they will be senior unsecured obligations reflecting in the external debt of Mexico. The new 5Y bond is priced at a new issue premium of ~36bp over its existing 6% 2030s that currently yield 5.22%.
Proceeds from the P-Caps issuance will be used to buy a portfolio of US Treasuries and/or STRIPS. Pemex will then take that portfolio and use it as collateral for loans through the repurchase market, using the proceeds as it deems fit. However, if Pemex is not able to pay back the loans, the banks will then seize the collateral. In this case, investors in the P-Caps would lose their collateral, and instead hold sovereign debt from Mexico.
Pemex’s dollar bonds were trading higher with its 6.625% 2035s up 0.8 points at 87.5, yielding 8.5%.
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