Pemex Offers to Exchange Some US$3bn in Debt

The Pemex Project Funding Master Trust financing vehicle of Mexico's state power company Pemex is planning to offer an exchange for part or all of seven different notes issues totaling nearly US$3bn, Pemex said in a statement Wednesday.

The offer applies to US$250mn of guaranteed notes due 2007, US$600mn of global guaranteed notes due 2007, US$598mn of global guaranteed notes due 2008, US$350mn of global guaranteed bonds due 2018, US$250mn worth of bonds due in 2023, US$400mn of global guaranteed bonds due in 2027, and US$500mn worth of exchange securities, the statement said.

"The money that we have in our cash balance labeled as being borrowed by Petroleos Mexicanos [Pemex] cannot be used to finance Pidiregas projects whereas money borrowed by the Master Trust is used to finance Pidiregas projects," a company source told BNamericas.

The Pidiregas mechanism is a tool Pemex uses for long-term upstream projects, and is financed by private debt. The issuer, Pemex Project Funding Master Trust, would deliver cash to Pemex at the market value of the exchange, since it is a way of financing Pidiregas projects without going to the market, as available cash is shifted from one level to another.

Exchange offers will run from November 17 to December 21. The money raised will be gradually incorporated into Pidiregas financed projects next year, the source added.

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