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Bond Market News

Judge Grants Definitive Suspension to Hydrocarbon Law That Benefited Pemex

June 8, 2021

Mexico’s reform to the Hydrocarbons Law, that was designed to benefit state-owned oil major Petróleos Mexicanos Pemex, was suspended permanently by Judge Juan Pablo Gómez Fierro. The definitive suspension, nullifying the reform proposed by President Andres Manuel Lopez Obrador (AMLO) on May 19, was granted with general effects and re-established the regulations imposed on the state-owned company Pemex to prevent it from having a favorable position over competitors. Judge Fierro stated in his resolution that the sudden elimination of asymmetric regulation to the Hydrocarbons Law would risk that state-owned companies might establish discriminatory prices, even if they held dominant power in the market, which could affect free competition and subsequently the final consumer.

Pemex’s USD bonds were down with its 6.75% 2047s down 1.92 points to 88.37, yielding 7.8% and its 6.625% 2049s down 1.29 to 86.75, yielding 7.74%

For the full story, click here

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