Mexico Investors Back Proposal to Boost State Control of Pemex
- Market expects continued government support for energy firms
- Pemex spreads tighten against sovereign with more room to gain
This article is for subscribers only.
Investors in Mexico’s state oil company Petroleos Mexicanos are cheering an energy reform bill that will grant the government more control over the energy sector and make the financially strapped oil company’s bonds more akin to sovereign debt.
The bill, approved overnight by which Mexico’s Senate, reclassifies Pemex and state utility Comision Federal de Electricidad as “public companies.” The change would increase government control over the firms and do away with requirements that they turn a profit. Investors wager that under the move the government will continue helping Pemex pay down its almost $100 billion debt burden.