Petroleos Mexicanos shelved plans to raise at least $1 billion in an asset-backed debt deal structured by Goldman Sachs Group Inc. as the world’s most-indebted oil driller seeks to avoid short-term borrowing this year.
Pemex paused the transaction after receiving an equity injection from the Mexican government in July, said two people familiar with the matter, who asked not to be named because the matter is private. Federal officials may provide additional support should Pemex need refinancing help, the people said.
A Goldman spokesperson declined to comment. Representatives at Pemex and Mexico’s Finance Ministry didn’t respond to requests for comment.
Bloomberg reported in February that Pemex was in talks with Goldman Sachs for financing guaranteed by its crude as part of bank deals that were expected to raise at least $1 billion. It is unclear if the amount had changed since then. The transaction could be considered again at some point, the people said.
Read more: Pemex Lines Up Goldman, JPMorgan for $1 Billion in Financing (1)
The company faces a liquidity crunch amid long-term declines in production and rising obligations from a debt pile that had grown to $110.5 billion at the end of June, the most of any oil major. Last month, Pemex received about $4 billion from the government, but some investors argue that the periodic capital injections and government tax breaks have done little to solve the company’s deep structural problems or address growing questions about its governance and sustainability practices.
Dollar bonds due in 2033 have fallen for three straight days to around 88 cents on the dollar, reversing gains that came after the equity injection was announced. The company’s debt has handed investors losses of more than 4% over the past month, compared to losses of 1% for an index of Latin American bonds.
Fitch Ratings in a Wednesday note said that a “substantive” increase in support for Pemex would hurt the sovereign rating. Total support under Andres Manuel Lopez Obrador has amounted to nearly $49 billion in capitalizations, tax breaks and other assistance.
--With assistance from Maya Averbuch, Maria Elena Vizcaino and Michael O'Boyle.
