Petróleos Mexicanos (Pemex) bonuses plunge as investors fear that plans to raise more cash will increase pressure on the world’s most indebted oil company.
On Wednesday, January 25, the state-owned company’s dollar-denominated debt was the worst performer in high-yield markets, as bonds maturing in 2041 fell as much as 2.3 cents to 70.63 cents, according to Trace data. The pullback came after traders weighed Pemex’s plan to sell at least $2 billion in new debt, a sum aimed at helping the company stay current as an avalanche of redemptions approaches.
“It’s a little disappointing that they would come, theoretically, without sovereign support,” said Edwin Gutierrez, head of emerging market sovereign debt at Abrdn.
While the government has said it will help Pemex if needed, it has yet to announce new measures.
The oil company is under pressure to raise funds for almost US$10 billion in debt repayments maturing this year that it had not considered in its annual budget. The possible bond sale would follow last June’s maneuver, which was considered a failure due to weak demand.
Since then, Pemex’s problems have multiplied. Payments on a debt of approximately $105 billion are piling up after its production has steadily declined for nearly two decades. Revenues have also suffered as the company is looking to focus on refining, rather than investing in more lucrative crude exports or new oil discoveries.
Additionally, on Wednesday, SLB, the world’s largest oil services provider, said it is owed $1 billion in unpaid bills in Mexico.
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