Mexico’s government said it had cut Petroleos Mexicanos’ obligation burden by $3.2 billion through a refinancing operation. The government swapped debt that was terminating soon for another bond with a maturity of 10 years, while additionally refinancing some medium development debt that was cheap, as per an assertion from the Finance Ministry. The activity will decrease the “financial pressure” on Pemex by $10.5 billion between 2024 and 2030, the ministry said, adding that the refinancing wouldn’t diminish the fiscal budget.
Mexico’s President Andres Manuel Lopez Obrador announced a $3.5 billion capital injection into Pemex in early December, saying it would be made through a series of bond market transactions. That came on top of initiatives last year to cut taxes and overhaul management at the company.
The government contributed $3.5 billion to the operation, which helped narrow the spread to sovereign bonds by 50 basis points, reducing Pemex’s annual financial costs by $180 million.
Pemex is flailing under $113 billion of debt, the most of any major oil producer, struggling to reverse over a decade of crude output declines, and is highly reliant on the federal government being willing to continue paying bondholders.
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