Pemex Sells $1.75 Billion of Bonds Abroad Amid Record-Low Yields

Petroleos Mexicanos, Latin America’s largest oil producer, sold $1.75 billion of 32-year bonds, taking advantage of record-low overseas financing costs to fund investments.

Pemex, as the company is known, priced the debt to yield 5.53 percent, or 280 basis points more than similar-maturity U.S. Treasuries, according to data compiled by Bloomberg. Barclays Plc, JPMorgan Chase & Co. and Banco Santander SA (SAN) managed the sale, according to a person familiar with the transaction 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, Bloomberg data show. Investors are piling into higher-rated 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 is rated Baa1 by Moody’s Investors Service, three levels above junk, and one grade lower at BBB by Standard & Poor’s.

To contact the reporter on this story: Boris Korby in New York at bkorby1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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