Mexican state-owned oil company Petroleos Mexicanos (Pemex) will receive a cash injection from the Mexican government of up to $3.5bn. Proceeds will be used to fund a liability management transaction that includes paying down obligations and a bond buyback, excluding its bonds due in 2022 and 2023, since the government is already covering them. The bondholders of the notes due between 2024 to 2030, will receive new notes and cash, whilst the investors with notes maturing after 2022 will receive just cash. Pemex is also restructuring its 5Y business plan, aiming to strengthen its financial position in the medium and long term, as well as to prepare itself for the challenges that face the energy sector, according to the company. John Padilla, MD at energy consultancy IPD Latin America, said “There is no meaningful evidence that the ship has been righting, that any of the underlying issues that plague Pemex have been resolved, what I would say is that administration after administration have almost singularly focused on the financial aspects and I think what we are seeing is that the financial aspects are one of the least of its worries.” With net debt expected to fall by about $3.5bn after the capital injection, Pemex is planning to issue between $700mn and $1bn USD-denominated bonds subject to market and other conditions.

PEMEX´s USD bonds inched higher with its 4.5% 2026s up 1.9 points to 100.61, yielding 4.34% and its 5.625% 2046s up 2.7 points to 80.77, yielding 7.34%.

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