Pemex
With Latin American economies booming and fiscal policy across the region generally sound, the largest issuers, especially Mexico, are barely to be seen in the international capital markets any more.
But Mexico's fabulous fiscal situation is a bit of a fiction – it has got to it only by taxing state oil company Pemex at stratospheric rates. Mexico is essentially passing its borrowing needs on to Pemex. Pemex, in turn, has become the latest darling of the capital markets.
By far the best Latin deal of 2004, for instance, was Pemex's $1.75 billion perpetual deal, sold largely to Asian retail investors in September. The biggest Latin corporate bond of all time, it had long duration – something oil companies always want – and also opened up a new universe of buyers for Pemex's debt.
The blow-out success of the deal came as a surprise to all three lead managers (Citigroup, Merrill Lynch and HSBC) as well as to Pemex's treasurer, Octavio Ornelas. The bond, originally envisaged as being no larger than $750 million, racked up $5 billion in orders in Asia alone, and it was easy to cancel the European leg of the scheduled roadshow.