Mexico’s Undersecretary of Finance and Public Credit Gabriel Yorio speaks during an interview with Reuters in Mexico City, Mexico September 11, 2019. REUTERS/Edgard Garrido
MEXICO CITY (Reuters) – Mexico’s Pemex said on Thursday it had launched a tender offer to prepay around a third of $14.7 billion in bonds maturing between 2020-2023, in President Andres Manuel Lopez Obrador’s latest effort to shore up the state oil firm.
The offer says Pemex is looking to prepay up to $5 billion of those bonds, using a major capital injection announced by the Mexican government for this purpose on Wednesday.
The offer will expire next Wednesday.
Lopez Obrador, a veteran leftist who took power in December, has vowed to revive Pemex, a company that became an icon of Mexican self-sufficiency after it was created with the expropriation of foreign oil interests in 1938.
However, years of declining oil output, mismanagement and corruption have taken their toll on the firm, which is now the world’s most heavily indebted oil company, with $104 billion in financial debt and which is fighting to avoid a credit downgrade to junk.
To avert a possible ratings downgrade, the Mexican government under Lopez Obrador has given Pemex tax breaks and cash support several times this year, and has budgeted for another $4.4 billion of similar support in 2020.
Reporting by Ana Isabel Martinez and Abraham Gonzalez in Mexico City; Additional reporting and writing by Stefanie Eschenbacher; Editing by Andrew Heavens and Matthew Lewis