The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Mexico: Banks free Pemex from bondage

HSBC, JPMorgan and Mizuho lend Mexico’s oil company $8 billion after investors show no interest in non-deal roadshow – and that’s the least of the firm’s problems.

rd_banner_column-780



The Mexican government tried to put a happy gloss on its announcement of an $8 billion loan from private-sector banks to its state oil producer Pemex on May 13. 

The market even bought it – briefly – with a rally in the company’s bonds (the 10- and 30-year benchmarks both rallied about 15 basis points shortly after president Andrés Manuel López Obrador, frequently abbreviated to Amlo, broke the news). 

But the rally faded quickly – and for obvious reasons: the loan confirms the lack of appetite for the credit among international institutional investors. 

Pemex had gone to New York in January on a non-deal roadshow to take the temperature of oil and gas investors. The feedback was that investors were not inclined to look past Amlo’s rolling back of important energy reforms that had brought private investment into the sector. 

Since the cost of new bonds was going to be prohibitive, the company pursued plan B, which was for HSBC, JPMorgan and Mizuho to stump up the money. They will (try to) syndicate it out to local and international investors.  



Pemex, which has a well-deserved reputation for being a poor refinery operator, in our view, would be greatly challenged to meet such an aggressive mandate
-Citibank


The pricing available to Pemex in the bond market was presumably outside the Libor plus 235bp that the banks offered for the five-year, $5.5








You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree