Morning Commentary: Pemex bonds in focus amid $5.2 billion government rescue package

By Rebecca Melvin

New York, Feb. 15 – The bonds for Petroleos Mexicanos SAB de CV were in focus on Friday after the government unveiled a $5.2 billion rescue package for the vulnerable oil major and said that more support will be forthcoming if needed.

Meanwhile, Pemex’s Alberto Velazquez Garcia said on Friday that Pemex won’t take on any new debt in 2019. The company has $104.1 billion in debt outstanding.

The rest of the market was fairly subdued as U.S. markets look ahead to a long holiday weekend in observance of Presidents Day on Monday when financial markets will be closed.

Pemex’s 6½% notes due 2027 were trading flat to lower and seen at 94.56 in the early going on Friday, compared to a close on the Luxembourg exchange on Thursday at 94.57.

In Latin America overall there was only one new issue priced this past week. Brazil’s Banco BTG Pactual’s new 7¾% tier 2 subordinated notes due 2029 remained firm in the aftermarket after the Sao Paulo-based financial company priced $600 million of the notes at par on Tuesday.

The deal ended up being the sole new issue from the Latin America region this past week, worsening the comparison of this year’s deal tally to 2018’s bumper crop of deals.

Latin America started out quieter compared to last year and now blackout periods mean most issuers will remain sidelined for the next few weeks.

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