Petroleos Mexicanos, Latin America’s largest oil producer, plans to sell $1.75 billion of 32-year bonds as soon as today as it seeks to take advantage of record- low overseas financing costs to fund investments.
Pemex, as the company is known, plans to sell the debt to yield 280 basis points, or 2.8 percentage points, more than similar-maturity U.S. Treasuries, according to a person familiar with the plans. Barclays Plc, JPMorgan Chase & Co. and Banco Santander SA (SAN) are managing the sale, said the person, who asked not to be identified because he wasn’t authorized to speak publicly on the matter.
State-owned Pemex is boosting investment to reverse seven years of output declines. The company pumped 2.55 million barrels a day on average last year, compared with as much as 3.38 million barrels a day at its peak in 2004. Pemex has quadrupled investments during the past decade to about $23 billion a year.
Yields on Pemex’s $2.96 billion of notes due in 2021 touched a record low 3.72 percent yesterday, according to data compiled by Bloomberg. Investors are piling into higher-quality emerging-market debt amid concern Europe’s sovereign crisis will derail global growth.
Pemex last issued debt in April, selling A$150 million ($153 million) of five-year notes. The new debt may be graded Baa1 by Moody’s Investors Service, three levels above junk, and one grade lower at BBB by Standard & Poor’s.
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