Pemex prices $4 billion two-part deal; Venezuela, PDVSA rebound on bond swap news

By Paul A. Harris

Portland, Ore., Sept. 13 – Petroleos Mexicanos SAB de CV (Pemex) priced $4 billion of senior notes (Baa3/BBB+/BBB+) in two tranches on Tuesday.

The Mexican state-owned oil company price $2 billion of seven-year notes at par to yield 4 5/8%. The yield printed at the tight end of yield talk in the 4¾% area.

Pemex also priced $2 billion of 31-year notes at par to yield 6¾%, on top of price talk.

Joint bookrunner Citigroup will bill and deliver. Barclays, HSBC, MUFG and Natixis were also joint bookrunners.

The company plans to use the proceeds to fund its concurrent tender and exchange offers and to finance its investment program.

There was some selling in Pemex issues to make way for Tuesday’s big deal, a source said, adding that selling was taking place in paper maturing in 2022, 2023, 2024 and 2046.

Meanwhile the iShares JPMorgan USD Emerging Markets Bond (EMB) ETF ended the day lower at $114.98 per share, down 1.1% or $1.28.

Venezuela outperforms

The battered debt securities of Venezuela and quasi-sovereign Venezuelan oil company Petroleos de Venezuela, SA (PDVSA) were outperforming at the New York open on news of a potential bond swap that could come in the next fortnight, a market source said.

The short end of the PDVSA maturity curve was significantly outperforming, the source said.

Meanwhile Brazil corporates were weaker on the day, led low by Petroleo Brasileiro SA (Petrobras).

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