UPDATE 3-Pemex bond orders hit US$18bn

jueves 28 de enero de 2016 15:24 GYT

(UPDATES order books, guidance)

By Paul Kilby

NEW YORK, Jan 28 (IFR) - Mexican oil giant Pemex squeezed pricing on a three-part benchmark dollar bond at least 25bp Thursday after order books for the first LatAm corporate deal of the year hit US$18bn.

The deal has been a hit among investors who liked cheap initial price thoughts of high 5% area on the three-year, 6.625%-6.75% on the five-year and 7.375% area on the 10-year.

Those levels were a good 70bp-100bp over the curve, where Pemex's existing 3.125% 2019s, 5.50% 2021s and 4.50% 2026s were being spotted at 4.95%, 5.85% and 6.31%, respectively.

That appears to have been enough to draw a considerable crowd to a credit that has been tainted by the recent tumult in the oil sector.

The bulging order book allowed leads to tighten pricing at least 25bp at official guidance of 5.5% on the three-year, 6.375% on the five-year and 7% area (+/-10bp) on the 10-year.

Even if the 10-year lands at 6.90%, pricing is likely to be seen as attractive, especially relative to the sovereign, whose new 4.125% 2026s were trading at a mid-market yield of around 4%.

The oil company picked an opportune time to tap the market.   Continuación...