Pemex Euro Pierces Dollar Curve

Pemex has raised EUR1.3bn ($1.75bn) in new 7-year bonds, it says, in a trade seen coming at an attractive level versus the Mexican state-owned oil company’s dollar curve. Investors put in for orders topping EUR5bn. The Baa1/BBB/BBB+ 2020 priced at 99.358 with a 3.125% coupon, to yield 3.229%, or MS+173bp, at the tight end of 175bp +/minus 2bp guidance that followed 190bp-area talk, according to people familiar with the terms. The issuer opted for a 7-year maturity over an 8-year tenor, the other spot where a new bond would have made sense based on investor feedback. The pricing compares to a MS plus 130bp-135bp level seen Wednesday on the issuer’s 2017 euro-denominated bonds, and a 195bp-200bp on its 2025s. DCM bankers away from the trade saw it coming at 5bp-10bp inside of Pemex’s USD curve and largely representing a smart trade for the issuer. The main investor types participating were pension funds, portfolio managers and financial institutions, Pemex says. BBVA, Credit Suisse and HSBC managed the transaction, which followed a three-day European roadshow. It was the first deal in the currency for Pemex since a $1.46bn-equivalent sale in 2009. Pemex was joined in the market Thursday by Panama, retapping its 2020 to fund a tender, but there is little indication of additional activity in a LatAm cross-border market lacking new announcements and issuers on the road.