Mexico’s indebted state oil company, Pemex, is searching for ways to make $10 billion in bond payments this year, an amount that neither the company nor Mexico’s government has planned for, Bloomberg News reported Monday.
Source: Reuters
Last month, Pemex Chief Executive Officer Octavio Romero said the company was in talks with the government about getting renewed support for paying off debt, Reuters reported. However, the finance ministry said last week that it expected Pemex to be able to pay debt due in the first quarter without government assistance.
The government has provided Pemex with tax breaks and capital infusions in recent years, but it stopped covering the company’s debt amortizations last year, the news service reported. “It’s become clear that under this administration, there will be no major Pemex bailout,” Roger Horn, a senior strategist at SMBC Nikko Securities America in New York, told Bloomberg News.
López Obrador’s social programs and over-budget public infrastructure programs have strained the government’s budget. In addition, oil income has fallen as a percentage of federal revenue amid long-term declines in production.
Pemex has outlined plans to avoid tapping capital markets in an effort to keep its debt level at approximately $105 billion through 2027 by seeking financing alternatives that are “discreet” and “innovative.”
By Latin American Energy Advisor
