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Pemex Successfully Concludes the New Management’s First Financial Operation

  • The agreement is being supported by 23 national and international financial institutions
  • The operation amounted to 8 billion dollars, the largest operation in Pemex’s and the country’s history
  • The operation closed at a fixed rate equivalent to 4.15 per cent

In a public show of trust of the actions implemented by the Mexican Government to bail out and strengthen the State-Owned Productive Company, which was held with the presence of the President of Mexico, Andrés Manuel López Obrador, Petróleos Mexicanos (Pemex), represented by its CEO, Octavio Romero Oropeza, signed the final agreement to refinance part of the company’s debt ​with representatives of 23 national and foreign financial institutions.

The refinancing process began on the 13th of May, when Petróleos Mexicanos announced the initial agreement reached with JP Morgan, Mizuho and HSBC during a press conference held at the National Palace.

As part of this process, over the past few weeks Pemex has held working meetings with the technical and financial analysis departments of the banks, in order to present the company’s plans for the future, both regarding oil production and the strengthening of refining operations. The banks also received reports regarding the actions undertaken to maintain financial discipline in the company and the measures set in place to achieve savings during the purchasing process, as well as the austerity measures implemented through the new management structure of the company.

For this debt refinancing agreement, Petróleos Mexicanos received the support of 23 national and foreign banking institutions, which undersigned the final agreement, and whose operation reached the goal of refinancing 8 billion dollars in debt, which makes it the largest operation in the history of both Pemex and the nation.

The banking institutions that participated in the final refinancing agreement were JP Morgan, Mizuho, HSBC, BBVA, BNP Paribas, MUFG Bank, Sumitomo Mitsui Banking Corporation, Bank of America, Bank of China, Banco Santander, Natixis, Barclays, Scotiabank, Société Générale, Credit Agricole, Citibank, ICBC, Goldman Sachs, Morgan Stanley, Banorte, ING, Banco de Crédito e Inversiones and DZ Bank.

This agreement does not represent a new debt incurred by Pemex, as it allows for the refinancing of debt for an amount of up to 2.5 billion dollars, and the renewal of two lines of revolving credit, for a maximum amount of 5.5 billion dollars. Furthermore, the operation did not demand any collateral or additional securities.

The interest rate of the operation closed with Libor + 235 reference, which is equivalent, as of the closing of the operation, to an equivalent fixed rate of 4.15%, which is lower than the regular funding levels of a new issuance in today’s market, which would be between 5.7% and 6.0%, taking a bond issued in U.S. Dollars with five years’ maturity as reference.

The representatives of the banking institutions all coincided in pointing out that their support to this agreement is an acknowledgment of the efforts carried out by Pemex’s management and by the Mexican Government to increase the company’s earnings, improve efficiency, stabilize production, as well as the commitment to transparency and accountability.

Las menciones de Pemex pueden referirse a Petróleos Mexicanos o a cualquiera de sus Empresas Productivas Subsidiarias.
Last Modified 02/07/2019 19:53 Pemex