Pemex could increase debt by US$5bn in 2010 - consultant

Wednesday, February 17, 2010

Mexican state oil company Pemex could increase its debt by some US$5bn in 2010, Gianna Bern, president of Chicago-based Brookshire Advisory and Research, told BNamericas.

"As far as specific needs go, I would probably say inside 10% of their current debt levels may be a reasonable expectation. They've already come to the market in the recent past, so I would probably assess their needs at this point in time to be in the 10% range," Bern said.

A January presentation from the state firm showed its debt level as of September 30 to be US$50.6bn, up from US$48.2bn year-on-year.

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"I think they're going to be very judicious about what their needs are. Pemex has always been very strategic in approaching the market in opportune times when interest rates are in their favor," Bern added.

José Luis Villanueva, Fitch Ratings' Latin America corporate finance director, told BNamericas that he expects the company's debt level will increase by between US$3bn and US$4bn in 2010, in line with the statements made during the company's Q3 earnings call by then-CFO Esteban Levín.

"Their investment plan is going to be very similar to 2009, between US$18bn and US$20bn. As a result, the change in debt will be an increase of between US$3bn and US$4bn," Villanueva said.

Total debt issues in 2010 will be between US$8bn and US$10bn, he added, also in line with Levín's outlook.

Of the total US$50.6bn debt at end-Q3, 41% was made up of international bonds, 20% export credit agencies, 17% bank loans, 17% bonds on the local stock exchange and 4% other.

Pemex is scheduled in March to present its financial report through the end of 2009.