Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Pemex's New York roadshow spooks investors, yields spike

Stock MarketsJan 11, 2019 10:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: PEMEX sign shows prices at a gas station in Monterrey

By Sheky Espejo

MEXICO CITY (Reuters) - Yields on the debt of Mexican state-run oil company Pemex rose sharply this week after the company failed during presentations in New York to lay out a clear plan to reduce debt and increase output, analysts said.

Pemex faces the possibility of a credit ratings downgrade due to costly proposals by the new government of leftist President Andres Manuel Lopez Obrador that include plans to build a new refinery and upgrade existing ones.

Half a dozen investors and analysts who either attended or were briefed on presentations in New York by the company's new chief financial officer, Alberto Velazquez, said they were unconvinced by the plan to turn around Pemex.

Mexican financial assets slumped late last year after Lopez Obrador canceled a partly-built airport project. They have regained ground in recent weeks, in part due to relief about an austere budget announced by his economic team.

Markets are watching closely for signs of how the new president will manage Latin America's second largest economy.

"It was a poor presentation and it is at a time when the market is increasingly sensitive about anything to do with Mexico," Pablo Cisilino, a portfolio manager at Stone Harbor, told capital markets publication Refinitiv IFR.

Pemex did not immediately respond for a request for comment.

The yield on Pemex's 6.5 percent coupon dollar bond due January 2029 spiked on Thursday and Friday, closing 35 basis points higher on Friday compared to Wednesday's close, according to Refinitiv data.

Both Pemex and the government were expected to try soon to issue debt on international markets, and the two-day road show launched on Wednesday by Velazquez and officials from Mexico's finance ministry was a bid to ease worries.

"It backfired," said one New York analyst, who spoke on condition of anonymity.

Petroleos Mexicanos [PEMX.UL], as the firm is formally known, has seen crude output drop for more than a decade as its major fields age and it has struggled to replenish reserves.

Another New York-based economist who attended the presentation agreed it did not go well for Pemex and said that the situation was "worrisome."

"They didn't know how to answer clearly," said the economist, who asked not to be named. "We'll see how they do."

Pemex's New York roadshow spooks investors, yields spike
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email