September 12, 2019 / 4:18 PM / 2 months ago

CORRECTED-UPDATE 1-Mexico's Pemex launches offer to prepay up to $14.7 billion of bonds

(Corrects maturities for bonds in second paragraph)

By Ana Isabel Martinez and Abraham Gonzalez

MEXICO CITY, Sept 12 (Reuters) - Mexico’s Pemex said on Thursday it had launched a tender offer to prepay up to $14.7 billion of its bonds, in the largest financial operation to shore up the state oil firm since President Andres Manuel Lopez Obrador took office.

The offer for bonds maturing between 2020 and 2023 comes a day after the Mexican government announced a major capital injection earmarked to prepay $5 billion of these bonds at the indebted energy company.

It was not immediately clear if Pemex was intending to prepay all of the $14.7 billion or only the $5 billion. Pemex has more than $104 billion of financial debt.

The bond 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 its toll on the firm, which is now fighting to avoid having its debt downgraded 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)

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