Pemex Suppliers Lose Big With Bonds After Surprise Debt Swap
- Suppliers sold $288 million in dollar notes at a 13% discount
- Pemex debt swap was unexpected and soured bond investors’ mood
A Pemex platform on the continental shelf in the Gulf of Mexico.
Photographer: Susana Gonzalez/Bloomberg
Petroleos Mexicanos’s suppliers are getting stuck with steep losses after the state-owned oil giant undertook a debt swap in lieu of repaying its maturing obligations with cash.
The losses are piling up for companies that didn’t have much choice but to accept new bonds after not being offered cash payment as part of Pemex’s $2 billion commercial debt refinancing in early June. The bonds offered one solution to address billions of dollars in accruing debts to Pemex’s offshore service providers and suppliers, as it fails to generate enough cash to pay them amid a heavy tax burden and declining production. But the move has left those it owed -- companies that service oil rigs or provide maintenance to offshore platforms, for example -- racing to monetize this unwanted debt as quickly as possible, even at a discount.