Pemex has taken advantage of a rebound in oil prices and a positive reaction to potential government support to print a three-part $5bn trade in Latin America’s first corporate issue of the year, after clinching shy of $18bn in demand.

Bookrunners BBVA, Bank of America-Merrill Lynch (BAML), JP Morgan and Santander issued initial price thoughts in the high 5% area on a 3-year tranche, 6.625%-6.75% area on a 5-year tranche and 7.375% area on a 10-year tranche as Brent crude oil prices rose on the day. Brent ended at $34.49 per barrel after trading as high as $35.84 on hopes of production cuts.

“Pemex was floating a small issue size, which they conveniently upsized, given the $17bn plus book,” one buyside source told LatinFinance. “There are a lot of things going in favor of Pemex and there is an attractive concession price, which is what investors are looking for, given the uncertain oil price outlook.”

The deal marks Pemex’s first cross-border trade of the year, less than two months after Moody’s cut the oil company’s global rating to Baa1 from A3. Pemex plans to raise $8bn to $11bn in the international capital markets this year.

At initial price thoughts, bankers away from the trade said Pemex’s new deal was offering generous concessions versus its own curve and the Mexico sovereign’s 4.125% 2026 benchmark 10-year that priced earlier this month.

“It is coming very cheap,” said a banker away from the deal. “Some of it is because of the oil business, but at the pricing level it is going to end up being around 290bp above the sovereign, which is a lot, given historically it had been in the 100bp area pickup over the sovereign.”

In the end, the bookrunners priced the Baa1/BBB+/BBB+ rated oil company’s 3-year, $750m tranche at par to yield 5.5%, the 5-year, $1.25bn tranche at par to yield 6.375% and the 10-year, $3bn tranche at 99.815 with a 6.875% coupon to yield 6.9%. All three benchmark tranches priced in line with guidance.

With Pemex’s 4.5% 2026 bond trading to yield around 6.21% pre-announcement, it was thought to offer a final 69bp new issue concession on its new 10-year note, bankers away from the deal said. The new Mexico 2026 bond was quoted at around 4.07%, implying roughly 285bp pickup to the Mexico 10-year.

The benefit for investors is the attractiveness of a spread premium to the Mexico sovereign. “It seems spreads are bound to tighten a little bit and we know the company has a negative free cash flow, but on the other hand, if oil prices decline, Pemex will receive support from the government,” the investor said.

Mexican Finance Minister Luis Videgaray said on Wednesday that the government is considering injecting more capital into the state-owned oil company.

Pemex was last in the bond market in November, when it sold a 1.5% CHF600m ($591m) 2020 note at 205bp over mid-swaps in a deal managed by BNP Paribas and Credit Suisse.