Pemex gives early results, lifts caps of waterfall exchange offers

By Sarah Lizee

Olympia, Wash., Feb. 5 – Petroleos Mexicanos SAB de CV announced the early results and increased caps of its waterfall exchange offers for 14 series of notes, according to a press release.

The tender caps for group A and for group B were each increased to $1.3 billion from $1 billion.

The early participation date was 5 p.m. ET on Feb. 4. The offers will expire at 11:59 p.m. ET on Feb. 19.

The group A waterfall offer consists of the following notes and the offered amount per $1,000 principal amount of existing notes, listed in order of acceptance priority level:

• $1,102,385,000 5½% notes due 2021 (Cusip: 71654QAX0) for $1,032.66 principal amount of new notes due 2031, of which $264,752,000 notes had been tendered and accepted for exchange by the early participation date;

• $366,023,000 6 3/8% notes due 2021 (Cusip: 71654QCA8) for $1,042.47 principal amount of new notes due 2031, of which $171,662,000 notes had been tendered and accepted for exchange by the early participation date;

• $790,083,000 4 7/8% notes due 2022 (Cusip: 71654QBB7) for $1,045 principal amount of new notes due 2031, of which $148,535,000 notes had been tendered and accepted for exchange by the early participation date;

• $568,468,000 floating-rate notes due 2022 (Cusip: 71654QCF7) for $1,050 principal amount of new notes due 2031, of which $63,854,000 notes had been tendered and accepted for exchange by the early participation date;

• $609,655,000 5 3/8% notes due 2022 (Cusip: 71654QCE0) for $1,056.50 principal amount of new notes due 2031, of which $157,487,000 notes had been tendered and accepted for exchange by the early participation date;

• $1,360,915,000 3½% notes due 2023 (Cusip: 71654QBG6) for $1,020 principal amount of new notes due 2031, of which $216,727,000 notes had been tendered and accepted for exchange by the early participation date;

• $1,019,571,000 4 5/8% notes due 2023 (Cusip: 71654QCD2) for $1,059 principal amount of new notes due 2031, of which $117,333,000 notes had been tendered and accepted for exchange by the early participation date;

• $1.5 billion 4½% notes due 2026 (Cusip: 71654QBW1) for $1,021.70 principal amount of new notes due 2031, of which $514,932,000 notes had been tendered by the early participation date and $111,953,000 had been accepted;

• $790,958,000 4¼% notes due 2025 (Cusip: 71654QBV3) for $1,037.20 principal amount of new notes due 2031, of which $32,172,000 notes had been tendered by the early participation date and none had been accepted; and

• $1,032,618,000 4 7/8% notes due 2024 (Cusip: 71654QBH4) for $1,067.50 principal amount of new notes due 2031, of which $72,009,000 notes had been tendered by the early participation date and none had been accepted.

Pemex will issue $1.3 billion of new 2031 notes as consideration for group A waterfall securities accepted in the group A waterfall offers.

The total amount of accrued interest to be paid by Pemex, together with the total amount of cash to be paid by Pemex in lieu of fractional amounts of new 2031 notes, will be about $6,498,931.44.

Pemex will accept tenders by holders of 2026 notes on a pro rata basis using a proration factor of about 21.88%.

Because the group A waterfall offer cap has been reached by the early participation date, no more group A notes will be accepted for exchange.

The group B waterfall consists of the following, listed in order of acceptance priority level:

• $973,047,000 5½% bonds due 2044 (Cusip: 71654QBE1) for $925 principal amount of new notes due 2060, of which $179,422,000 notes had been tendered by the early participation date and $179,332,000 had been accepted;

• $1,699,232,000 5 5/8% bonds due 2046 (Cusip: 71654QBX9) for $926.80 principal amount of new notes due 2060, of which $751,059,000 notes had been tendered by the early participation date and $750,969,000 had been accepted;

• $3,328,663,000 6.35% bonds due 2048 (Cusip: 71654QCL4) for $988 principal amount of new notes due 2060, of which $2,018,708,000 notes had been tendered by the early participation date and $444,125,000 had been accepted; and

• $1,560,481,000 6 3/8% bonds due 2045 (Cusip: 71654QBR2) for $999 principal amount of new notes due 2060, of which $733,912,000 notes had been tendered by the early participation date and none had been accepted.

Pemex will issue $1.3 million of new 2060 bonds as consideration for group B waterfall securities accepted in the group B waterfall offers.

The total amount of accrued interest to be paid by Pemex, together with the total amount of cash to be paid by Pemex in lieu of fractional amounts of new 2060 bonds, will be about $14,892,755.05.

Pemex will accept tenders by holders of 2048 bonds on a pro rata basis using a proration factor of about 22.04%.

Because the group B waterfall offer cap has been reached by the early participation date, no more group B notes will be accepted for exchange.

The total consideration for each series of notes includes an early tender premium of $50 per $1,000 note. Holders who tendered their notes for exchange by 5 p.m. ET on Feb. 4 are be eligible to receive the early tender consideration.

The company priced $2.5 billion of 5.95% notes due 2031 and $2.5 billion of 6.95% notes due 2060 at par on Jan. 21, according to a company press release. The securities to be issued in connection with the exchange offers will constitute an additional issuance of new securities and will be governed under the 2009 indenture.

Global Bondholder Services Corp. (866 470-4500 toll free or 212 430-3774 collect) is the information and exchange agent. Barclays, BBVA Securities Inc., BNP Paribas Securities Corp., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, MUFG, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. have been retained to act as dealer managers in connection with the tender offers.

Pemex is a Mexico City-based oil and gas company.

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