Pemex details exchange, tender offers for 18 existing securities

Chicago, Dec. 8 – Petroleos Mexicanos (Pemex) officially launched its liability management transactions including offers to exchange existing securities for new securities and cash and offers to purchase existing securities for cash, according to a Monday press release.

The maximum cash amount to be paid will be $4.5 billion, including interest.

The exchange offers will have priority over the cash purchase offers.

Under the exchange offers, Pemex will offer to exchange the following outstanding securities for a combination of new securities and cash:

• $1,032,618,000 outstanding 4 7/8% notes due 2024 (ISINs: US71654QBH48, US71656LAX91, US71656MAQ24), for an early participation consideration of $1,047.50 with $700 in cash and $347.50 in new securities;

• $790,958,000 outstanding 4¼% notes due 2025 (ISINs: US71654QBV32, US71656LBA89, US71656MBA62), for an early participation consideration of $1,028.75 with $600 in cash and $428.75 in new securities;

• $1.5 billion outstanding 6 7/8% notes due 2025 (ISINs: US71654QDG47, USP7S08VBZ31), for an early participation consideration of $1,106.25 with $550 in cash and $556.25 in new securities;

• $1,388,047,000 outstanding 4½% notes due 2026 (ISINs: US71654QBW15, US71656LBD29, US71656MBD02), for an early participation consideration of $1,022.50 with $500 in cash and $522.50 in new securities;

• $3 billion outstanding 6 7/8% notes due 2026 (ISINs: US71654QCB68, US71656LBK61, US71656MBK45), for an early participation consideration of $1,106.25 with $450 in cash and $656.25 in new securities;

• $2,360,430,000 outstanding 6.49% notes due 2027 (ISINs: US71654QDB59, US71654QCQ38, USP78625DW03), for an early participation consideration of $1,077.50 with $400 in cash and $677.50 in new securities;

• $5.5 billion outstanding 6½% notes due 2027 (ISINs: US71654QAM42, US71656LBS97, US71656LBQ32, US71654XAK37, US71654QAK85, US71656MBQ15, US71656MBS70, USP78628AE70), for an early participation consideration of $1,077.50 with $400 in cash and $677.50 in new securities;

• $102,228,000 outstanding 9½% global guaranteed bonds due 2027 (ISIN: US706451AX98), for an early participation consideration of $1,190 with $400 in cash and $790 in new securities;

• $225,792,000 outstanding 9½% guaranteed bonds due 2027 (ISINs: US706451BD26, US706451AW16, USU70577AS72), for an early participation consideration of $1,190 with $400 in cash and $790 in new securities;

• $2.5 billion outstanding 5.35% notes due 2028 (ISINs: US71654QCK67, US71654QCH39, USP78625DD22), for an early participation consideration of $1,007.50 with $100 in cash and $907.50 in new securities;

• $2 billion outstanding 6½% notes due 2029 (ISINs: US71654QCP54, US71654QCM24, USP78625DV20), for an early participation consideration of $1,046.25 with $50 in cash and $996.25 in new securities; and

• $4,420,831,000 outstanding 6.84% notes due 2030 (ISINs: US71654QDC33, US71654QCT76, USP78625DX85), for an early participation consideration of $1,046.25 with $50 in cash and $996.25 in new securities.

Under the second set of offers, Pemex is offering to purchase for cash the following outstanding securities:

• $948,263,000 outstanding 5 5/8% bonds due 2046 (ISINs: US71654QBX97, US71656LBE02, US71656MBE84) for an early participation consideration of $827.50;

• $793,670,000 outstanding 5½% bonds due 2044 (ISINs: US71654QBE17, US71656LAN10, US71656MAN92) for an early participation consideration of $827.50;

• $2,884,538,000 outstanding 6.35% bonds due 2048 (ISINs: US71654QCL41, US71654QCJ94, USP78625DE05) for an early participation consideration of $858.75;

• $1,560,461,000 outstanding 6 3/8% bonds due 2045 (ISINs: US71654QBR20, US71656LAY74, US71656MAY57, US71656LBT70, US71656MBT53) for an early participation consideration of $875;

• $6 billion outstanding 6¾% bonds due 2047 (ISINs: US71654QCC42, US71656LBM28, US71656MBM01) for an early participation consideration of $890; and

• $3.8 billion outstanding 6.95% bonds due 2060 (ISINs: US71654QDF63, US71654QDA76, USP78625EB56) for an early participation consideration of $891.25.

The bonds across both sets of offers are listed above in order of acceptance priority level, from 1 to 17. The two series of 9½% guaranteed bonds due 2027 are at the same acceptance priority level 8.

All of the considerations are based on $1,000 notes.

The early considerations either constitute $50 of new securities, if applicable, or for the cash offers $50 in cash.

Interest will also be paid to the applicable settlement date.

An earlier release noted that the liability management transactions do not target outstanding Pemex securities maturing in 2022 and 2023, given the commitment from the Mexican government to ensure budgetary allocations for additional capital injections to Pemex to cover those maturities.

The cash part of the liability management transactions will be financed with proceeds from a capital injection from the Mexican government and a concurrent issuance of new money securities.

The newly issued securities to be delivered as part of the consideration in the exchange offers are expected to have identical terms (other than issue date), be consolidated, form a single series and be fully fungible with the new money securities.

The terms of the new issue securities are 6.7% notes due 2032. Principal will be repaid in three installments on Feb. 16, 2030, Feb. 16, 2031 and at maturity.

Tenders may be prorated, if necessary.

The offer is contingent on the successful closing of the new notes that priced on Tuesday.

The early participation date for the full consideration is 5 p.m. ET on Dec. 20, also the withdrawal deadline.

If there is an early settlement date, timing is expected three business days after the early participation deadline.

The offers expire at 11:59 p.m. ET on Jan. 5.

Final settlement is planned for three business days after the expiration time.

Global Bondholder Services Corp. is acting as the information, tender and exchange agent for the offers (866 924-2200, 212 430-3774).

BofA Securities, Inc. Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and HSBC Securities (USA) Inc. are the dealer managers.

The state-owned petroleum company is based in Mexico City.

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