Thursday, 2 April 2009

Pemex Issues 10 Billion Pesos of Domestic Three-, Seven-Year Bonds; First Step to See Local Bond Spreads Narrowing, People Say

Petróleos Mexicanos SA, the giant oil company controlled by the Mexican government, sold debt in the domestic markets amid hefty demand for long term instruments. We had extensively talked about the health of the Mexican debt market -- which for months has only allowed for corporate paper issuances at the expense of long-term corporate bonds offerings. It seems that finally, issuances from the highest-rated companies are kicking off. Pemex's transaction was a litmus test for the depth of this market -- clearly it passed it well, according to some analysts.

Terms of the Pemex sale were: three-year floating-rate notes (FRN) linked to the benchmark interbank interest rate TIEE; the issue was priced to yield TIEE plus a spread of 100 basis points. The total issued of this tranche was 6 billion pesos. Pemex also placed 4 billion pesos of seven-year, fixed-rate bonds at a yield of 9.15 percent. The yield has an equivalent in Mexican Treasury notes rates -- the Mbonos of similar maturity plus 1.6 percentage points.) Demand for the offering topped a sizzling 24 billion pesos, and most of the bids came in from local pension funds. These funds ended up being the major buyers of the paper, according to a banker involved in the sale.

No comments:

Post a Comment