Pemex Starts US$1.8bn Perpetual Bond Issue

Mexico's state oil company Pemex started the process Tuesday of issuing a US$1.75bn perpetual bond on foreign markets.

Perpetual bonds do not have a maturity date, although in this issue Pemex has an option to amortize the debt after the fifth year. The bonds were priced September 21 and Pemex will close the transaction on September 28, a company source told BNamericas, adding that annual interest will be 7-8%.

"An important part of the debt was auctioned on the Asian market," the source said, without specifying further. Local papers report that Asian demand accounted for 65-75% of the total issue, with the remainder placed in Europe and the US.

"This perpetual bond was attractive to the market where it was auctioned, in the Asian retail market," the source said. The bond "allows us to maintain our curve because the maturity date could be infinite or be very long-term. One is able to administer yearly expiry dates [on debt]," the source added. Merrill Lynch, Citigroup and HSBC were the placing agents.

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