Pemex Eyes Domestic Bond Issue

Pemex has $1bn-$2bn in funding needs for this year, roughly half of which will come from export credit agencies (ECAs). It already has lines with Eximbank, JBIC and European ECAs. With pre-funding for 2008, the market target is around $1bn, which will be placed locally later in 2007, Pemex associate managing director of finance Mauricio Alazraki tells LatinFinance. “This will be done opportunistically. It’s not a necessity,” says Alazraki. “It could be a longer dated bond, 20 or 30 years,” he adds. “The whole curve is open.” Pemex is also considering fine tuning the dollar and euro curves, substituting illiquid bonds with larger more efficient issues. But pesos are the most attractive after the swap. “The market that’s cheapest is the local market. Certificados bursatiles, if you translate to dollars, it’s the cheapest funding source,” says Alazraki, who has extensive experience in all of the debt markets open to Latin issuers. “For the bulk of our funding needs in the future, the Mexican market is the main option. Probably, after that it would be the bank market,” he adds. (For more on this interview, see www.latinfinance.com).