Background and Relevance of Petróleos Mexicanos (Pemex)
Petróleos Mexicanos, commonly known as Pemex, is Mexico’s state-owned petroleum company and a significant player in the global energy market. Established in 1938, Pemex is responsible for exploring, producing, refining, and marketing oil and natural gas in Mexico. Given its crucial role in the country’s energy sector, Pemex’s financial health and stability have direct implications for Mexico’s economy and its citizens.
Pemex’s Request to List Bonds on BMV’s International Quotation System (SIC)
Pemex has recently sought authorization from the Bolsa Mexicana de Valores (BMV) to list existing bonds worth $3.777 billion in the SIC, an international quotation system within the BMV. These bonds were initially issued in Luxembourg, with a maturity date of 2031 and an annual interest rate of 5.95%.
Purpose and Potential Benefits
The primary objective of this listing is to enable Mexican investors to acquire these bonds, which were previously unavailable to them. By listing on the SIC, Pemex aims to broaden its investor base and potentially improve funding costs. Gabriela Siller, Director of Analysis at Banco Base, suggests that this move could be an attempt to increase the number of investors interested in holding these bonds, as Mexican investors might exhibit lower risk aversion compared to international counterparts.
Current Credit Ratings and Challenges
Pemex’s credit ratings have been a concern for potential investors. Out of the three major rating agencies, only Standard & Poor’s Global Ratings (S&P) assigns Pemex an investment-grade rating of BBB. Moody’s and Fitch Ratings, on the other hand, have given Pemex lower ratings of B3 and B+, respectively. These sub-investment grade ratings might have contributed to the limited acceptance of Pemex bonds in international markets.
Timeline and Implications
If the authorization is granted, Pemex bonds (identified by the ticker symbol PEM0131) will start trading on the SIC from July 17. This development could potentially attract more Mexican investors and improve Pemex’s funding costs, thereby supporting the company’s growth and contributing to Mexico’s economic stability.
Key Questions and Answers
- What is Petróleos Mexicanos (Pemex)? Pemex is Mexico’s state-owned petroleum company responsible for the exploration, production, refining, and marketing of oil and natural gas within Mexico.
- What are Pemex’s existing bonds? Pemex has outstanding bonds worth $3.777 billion, with a maturity date of 2031 and an annual interest rate of 5.95%. These bonds were initially issued in Luxembourg.
- Why is Pemex seeking to list these bonds on BMV’s SIC? The primary objective is to allow Mexican investors easier access to these bonds, potentially broadening the investor base and improving funding costs for Pemex.
- What are Pemex’s current credit ratings? Out of the three major rating agencies, only S&P Global Ratings assigns Pemex an investment-grade rating of BBB. Moody’s and Fitch Ratings have given Pemex lower ratings of B3 and B+, respectively.
- When will Pemex bonds start trading on the SIC? If authorized, Pemex bonds will commence trading on the SIC from July 17.
