Pemex Amendment Nears Completion

Pemex has seen some banks fall by the wayside as it looks to amend a dual-tranche loan with tighter financing terms, but the transaction is on track to achieving its $3.25bn size, say bankers. Inbursa, the financial institution controlled by Mexican billionaire Carlos Slim, is heard to be one of the banks that have declined to participate. “They are price sensitive so for them it didn’t work and they declined,” says one banker. Banks that bought the loan in the secondary market were also expected to turn down the Mexican state-owned oil company’s offer. “The original price didn’t make sense, so that is why they bought it in the secondary,” the banker explains. That said, the amendment is expected to get final approval sometime this month, and the company is heard asking banks to roll over interest payments on a weekly basis until the new pricing has become effective. Pemex launched the refinancing of its $3.25bn dual-tranche loan in July, with the aim of reducing margins by another 50bp. It closed the original transaction in December, but had a change of heart after seeing telecom America Movil lock in just 50bp over Libor on a $2bn 3.5-year loan in April. After paying Libor+125bp on its $1.25bn 3-year revolver and plus 150bp on a $2bn 5-year term loan, Pemex was heard to be less than satisfied with the spreads it had achieved just four months earlier. The company intends to reduce the margin on the revolver to Libor+75bp, while also cutting the term loan to Libor+100bp. Commitments fees will also fall to 25bp from 45bp. Banks will be paid a 25bp amendment for rolling over existing debt, and 35bp for any new money. Commitments were due August 3 with the closing previously scheduled for August 5. Participants on the original deal were Deutsche, Goldman Sachs, Intesa Sanpaolo, Credit Suisse, Societe Generale, Bayern LB, JP Morgan, SMBC, Bank of Tokyo-Mitsubishi, Mizuho, Morgan Stanley, Banco Santander, Natixis, EDC, DZ Bank, Bank of New York and Scotia. Sumitomo came