Mexico, Pemex prepare new benchmarks

Mexico, Pemex prepare new benchmarks

Bonds Capital Markets Corporate & Sovereign Strategy Fixed Income Debt Energy Mexico

Mexico and the state-owned oil company Pemex could both issue new benchmark bonds within the next month, LatinFinance has heard.

"They need to give the market a sense that they have the ability to raise debt," said a debt capital markets banker in New York.

"They will each have to do a benchmark transaction for more than $1.5bn and be very careful to offer spreads that reflect the credit risk and a high enough premium to attract as many possible buyers to the book," he added.

Barclays led officials from the finance ministry and Pemex on a round of non-deal marketing meetings with bankers, institutional investors and ratings agencies in New York on January 9 and 10.

"This working trip will allow Pemex to open new channels of communications and continue consolidating its presence in the international financial markets," the oil company said in a statement.

The banker said he does not expect to see the bond deals come to market in the next 30 days, but another source said Mexico and Pemex could issue new notes within two weeks.

After a $2bn issue in October last year, a $1.5bn bond sale from Pemex may appear "symbolic" when compared the $5bn deals that the oil company is more known for, the banker said.

"Pemex used to offer 15bp to 30bp for $5bn jumbos, but if it were to do something of that size now, it would have to pay more than 50bp," the banker said.

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