Pemex Scores Tight MXP

Pemex issued MXP10bn of 2016 bonds Thursday, after receiving MXP23.1bn in orders, according to bankers on the deal. The bonds priced at 21bp over TIIE, tight to the 23bp- 28bp over TIIE guidance, according to an investor. “We were very pleased by the participation in the deal by pricing achieved for a 5-year bond,” Mauricio Alazraki, managing director of finance and treasury, tells LatinFinance. “The market is very receptive to the TIIE floating rate format compared to the fixed rate format which, together with the flight to quality environment, gave us the ability to achieve low spreads.” He adds that the deal represents approximately half of the total amount of debt Pemex wants to issue this year in Mexican pesos. The issuance received 129 orders, says a banker on the deal. Investors express mixed views on the pricing. “This was a good bond issue and attractive for domestic investors, as Pemex usually issues in the foreign market,” says one Mexican asset manager. Another Mexico-based investor says that pricing was attractive for debt from a state-owned company. “The pricing was not expensive and as there have not been many corporates coming to the market in the first 3 months of the year, there was understandably a lot of demand.” One Afore investor, however, says the spread was too tight for the bonds to be attractive for his fund, while another Afore investor had expected tighter pricing, around the 15bp over TIIE mark. Orders came from a diversified investor base including pension funds, mutual funds, private banks, trading desks and insurance companies. Ixe, Banamex and Actinver were joint leads on the deal, which is rated AAA on a national scale. Proceeds will be used to pay down outstanding debt and for investment purposes. The state-owned oil company last came to the domestic market June, when it priced MXP5bn in a reopened 9.1% of 2020 bond to yield Mbonos plus 113bp.