Pemex’s dollar bonds slid by ~1 point with Bloomberg noting that markets assimilated the news of its $2bn bond issuance plan. They noted that raising the amount would add more pressure on the company’s finances. This would further be subject to difficulty if the company does not receive support from the sovereign. Declan Hanlon, a chief strategist at Santander Investment Securities said that the company “is unlikely to generate substantial free cash flow at current oil prices… with over $20 billion in debt maturing by the end of 2025, the government will need to inject substantial equity if gross leverage is to be reduced”. He added that it would require over $5bn in equity and new issuances to be able to address its amortization schedule.

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