Pemex to Issue US$1.5bn Worth of 10, 30-Year Bonds

Mexico's state oil company Pemex plans to issue US$1.5bn debt on the international market through the reopening of its project funding master trust that managed its first long-term bond issue in June 2005, a source close to the operation told BNamericas, confirming local press reports.

Credit Suisse, Lehman Brothers and UBS Investment Bank are leading the financial operation, which will be officially announced in the coming days, the source said. Money raised from the issue will be for long-term infrastructure projects.

Pemex's original 2005 bonds issue was in two tranches: the first 10-year tranche was worth US$1bn and the second 30-year tranche US$500mn, according to a previous BNamericas report.

The Pemex project funding master trust will add US$750mn to the 10-year bond, which will yield 5.75% annual interest, 1.38 percentage points over the US treasury rate, Reuters reported.

Pemex also will add US$750mn to the 30-year bond, which will yield 6.625% interest, 1.98 percentage points over the US treasury rate.

The existing bonds will mature on December 15, 2015 and June 15, 2035 respectively, according to a previous BNamericas report.

Credit ratings agency Moody's has rated the issue Baa1, Standard & Poor's (S&P) BBB and Fitch BBB-, according to Reuters.

According to Fitch, the oil company's debt has increased to more than US$25bn in 2005 from around US$2.5bn in 2001.

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