Pemex Sells Record Amount of 30-Year Bonds After Energy Reform
Petroleos Mexicanos, the state-owned oil company, sold $3 billion of 30-year bonds, a record for an emerging-market corporate issuer, as laws opening up the country’s energy sector to outside investment spur demand.
Pemex, as the company is known, issued the securities to yield 6.43 percent. The producer also sold $500 million of notes due in 2019 to yield 3.125 percent and $500 million of debt due in 2024 to yield 4.945 percent.
While Mexico’s energy law enacted last month ends Pemex’s 75-year monopoly on oil production in the country, the government says the measure will leave the company with more money to invest in new drilling projects and estimates that its output could jump as much as 60 percent by 2025.
“Investors are looking at the energy reform pretty positively,” David Bessey, a money manager at Prudential Financial Inc., said in a telephone interview from Newark, New Jersey. “It is an indication that Mexico’s credit quality is going to be improving over time.”
Brazil’s Vale SA, the biggest iron-ore producer in the world, sold $2.5 billion of 30-year bonds in 2006, according to data compiled by Bloomberg.
Pemex issued 1.3 billion euros ($1.8 billion) of 2020 bonds on Nov. 21. It was the biggest Mexican issuer of corporate debt last year, raising $9.2 billion in the international market, according to data compiled by Bloomberg. The world’s fifth-largest oil producer pumped an average of 2.523 million barrels a day in 2013.
The yield on Pemex’s $2.1 billion of bonds due in 2023 rose three basis points today to 4.70 percent.
Bank of America Corp., Deutsche Bank AG and Goldman Sachs Group Inc. arranged the transaction.
Petroleo Brasileiro SA, Brazil’s state-run company, is considering selling local infrastructure bonds this year as well as debt denominated in dollars, Chief Financial Officer Almir Barbassa said today in a telephone interview from Rio de Janeiro. Petrobras, as the company is known, sold $5.1 billion of bonds denominated in euros and pounds on Jan. 7 to help finance a $237 billion five-year investment plan through 2017.
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