Pemex bonds mixed to lower after package news; Turk Telekom on tap

By Rebecca Melvin

New York, Feb. 15 – The bonds for Petroleos Mexicanos SAB de CV were mixed to lower on Friday after the government announced a $5.2 billion rescue package for the vulnerable oil major, and Pemex chief financial officer Alberto Velazquez Garcia said the company won’t take on any new debt in 2019.

The company has $107 billion in debt outstanding, with payments on $5.3 billion of debt due by the end of May.

Investors expressed their disappointment in the package, and Fitch Ratings said the Mexican government’s actions are unlikely to undo its last credit rating action or be enough to prevent continued deterioration of the company’s credit quality.

The package includes a capital injection of $1.25 billion, a plan to transfer $1.75 billion in funds related to Pemex pension obligations, reducing Pemex’s tax burden by $750 million and deploying $1.6 billion in estimated savings from a crackdown on fuel theft.

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.

Looking ahead, Turk Telekomunikasyon AS said it plans to sell a dollar note under Rule 144A and Regulation S on the heels of the favorable reception that the sovereign got for its new $2 billion, three-year Islamic bond, or sukuk.

© 2015 Prospect News.
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