Pemex announces early results for remaining offers, waives condition

New York, Feb. 15 – Petroleos Mexicanos announced the early results for its any-and-all tender offers and its waterfall tender offers.

The company also announced that it was waiving a minimum participation condition.

Pemex will buy a total of $695,857,000 of notes in the any-and-all offer, according to a news release.

Specifically, it accepted for purchase:

• All $138,498,000 of the $327,409,000 of 3 1/8% notes due 2019 that were tendered. The total purchase price is $1,009.64 per $1,000 principal amount; and

• All $557,359,000 of the $750 million of 5½% notes due 2019 that were tendered. The total purchase price is $1,029.64 per $1,000 principal amount.

The total purchase prices include an early tender premium of $30.00 per $1,000 principal amount.

Pemex waived the condition that required that a majority of the outstanding 3 1/8% notes be tendered.

The company had been soliciting consents to amend the note indenture to shorten the notice period for an optional redemption to not less than three business days and no more than 10 business days.

Because consents from a majority of the holders were not received, the note indenture will not be amended unless the required consents are received by the expiration of the offer.

Pemex was also soliciting consents for the 5½% notes to make a similar change to the call notice period.

Sufficient consents were received and a supplemental indenture will be executed on the settlement date.

The early deadline for the offers was 5 p.m. ET on Feb. 14.

The any-and-all tender offer continues until 11:59 p.m. ET on March 1, but any further notes submitted for purchase will not receive the early tender premium.

Waterfall offer

In the waterfall offer for three series of notes, two series were oversubscribed by the early tender date and Pemex lifted the cap for a third series to allow it to buy all the tendered notes.

Notes will be purchased as follows:

• $91,843,000 was accepted from the $590,721,000 that was tendered of the $1,312,275,000 of outstanding 8% notes due 2019 using a pro ration factor of 15.57%. The aggregate purchase price for this series was capped at $100 million. The total purchase price is $1,065.92 per $1,000 principal amount;

• $183,017,000 was accepted from the $503,808,000 that was tendered of the $1 billion of outstanding 6% notes due 2020 using a pro ration factor of 36.38%. The aggregate purchase price for this series was capped at $200 million. The total purchase price is $1,065.96 per $1,000 principal amount; and

• All $817,303,000 that was tendered from the $1.5 billion of outstanding 3½% notes due 2020. The aggregate purchase price cap for this series was increased to $833,433,382.72 from $600 million after previously being raised from $200 million. The total purchase price is $1,017.50 per $1,000 principal amount.

The total purchase prices include an early tender premium of $30.00 per $1,000 principal amount.

The overall purchase price cap for the tender is now $1,133,432,614.97, up from $900 million and from $400 million originally.

The early deadline for the offers was 5 p.m. ET on Feb. 14.

The waterfall tender offer continues until 11:59 p.m. ET on March 1, but any further notes submitted for purchase will not receive the early tender premium. In addition, no further notes will be accepted for purchase.

Global Bondholder Services Corp. (866 470-4500) is the depositary and information agent for the tender offers and consent solicitation.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) and BofA Merrill Lynch (888 292-0700 or 646 855-8998) are the dealer managers.

Earlier exchange offers

Pemex previously announced on Feb. 13 that it had issued $1,828,663,000 principal amount of new bonds due 2048 in exchange for two note series in an offer that ended at 5 p.m. ET on Feb. 7.

The issuer also paid $10,164,714.68 of accrued interest.

Pemex priced $4 billion of senior notes in two tranches due 2028 and 2048 on Feb. 1, with $2.5 billion of 5.35% notes due Feb. 12, 2028 at par and $1.5 billion of 6.35% notes due Feb. 12, 2048 at par.

Including the notes to be issued in the exchange, the aggregate principal amount of 2048 bonds to be issued will be $3,328,663,000, according to a company update on Friday.

All the tenders and exchanges were originally announced on Feb. 1.

In the exchange, the company was offering to issue new securities due 2048 under two separate private offers for holders who are qualified institutional buyers under Rule 144A or non-U.S. persons under Rule 902.

Proceeds of the 5.35% notes will be used to fund the tender offers with any remainder to finance the company’s investment program and for working capital. For the 2048 bonds, proceeds will be used to finance the tenders with any remainder for general corporate purposes, including the repayment of debt.

Holders had tendered for exchange the following amount of notes, with the exchange value consisting of new bonds due 2048 for each $1,000 principal amount:

• $952,454,000 of $2,658,039,000 5½% bonds due 2044 with an exchange value of $926.25; and

• $1,021,065,000 of $3 billion 5 5/8% bonds due 2046 with an exchange value of $927.50.

In exchange, Pemex will issue $881,899,000 of new bonds due 2048 for the 5½% bonds and $946,764,000 of new bonds due 2048 for the 5 5/8% bonds.

For the 5½% bonds, $2.66 million remains under guaranteed delivery procedures.

The offers were contingent on completion of the corresponding retail tender offer as well as the issue of new notes.

Global Bondholder Services Corp. (866 470-4500 or 212 430-3774) is the information agent and exchange agent.

Retail tenders

Pemex said that in order to comply with rules for abbreviated exchange offers, it was required to hold a concurrent offer to purchase those same bonds for cash in retail tender offers from holders who are not eligible for the exchange.

Holders who are eligible to participate in the exchange cannot take part in the retail offers, the release noted.

The retail tender offers also ended at 5 p.m. ET on Feb. 7 with settlement slated for Feb. 12.

Holders had tendered $2,052,000 of the 5½% bonds due 2044 and $2,488,000 of the 5 5/8% bonds due 2046.

The company said it paid $4,208,285 to fund the tender offer, including notes tendered through the guaranteed delivery procedures.

Holders also received accrued interest of $21,493.86.

In the tender, the company was offering to purchase up to $100 million of each series of notes at a price for each $1,000 principal amount of $926.25 for the 5½% bonds and $927.50 for the 5 5/8% bonds.

The offers were contingent on completion of the corresponding exchange offer as well as the issue of new notes.

Global Bondholder Services Corp. (866 470-4500, 212 430-3774 or gbsc-usa.com/Pemex/) is the information agent and tender agent.

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

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