The company expects the government to extend similar financial support next year as it did this year, according to Carpio. “Investors seemed focused on the continued government support for Pemex's debt and on the liability management plans that are expected to be announced after the Mexican budget is presented,” noted William Snead, an strategist at Banco Bilbao Vizcaya Argentaria.
A liability management plan typically aims to extend the maturity profile of a company's bonds or reduce financial costs, added Snead. Sheinbaum indicated in her press conference on Wednesday, October 30, that she will soon present a plan for Pemex and will sign a bill that will reclassify it as a public company.
On Tuesday, Pemex reported net losses of 161.3 billion pesos for the third quarter, compared to 79.1 billion pesos for the same period last year. “It's still early, but initial comments give reason to believe that the next six years could be better than the last six.”
The new management team has also set the ambitious goal of achieving net zero leverage, according to Lucror Analytics, which has a buy recommendation for Pemex bonds. “This goal will be difficult to achieve in the short and medium term,” wrote analyst Lorena Reich in a note on Wednesday.
Pemex bonds rose on Wednesday, leading gains in Latin America, amid expectations that the state-owned oil company will receive a financial boost from Mexico's budget for 2025. Pemex's dollar bonds rose across the curve: the securities maturing in 2027 gained nearly 2.8 cents to 106.5 cents on the dollar, while the bonds maturing in 2050 added more than 2 cents, according to Trace data.
Pemex is currently working on a liability management plan that will be announced after President Claudia Sheinbaum's administration publishes the 2025 budget, scheduled for November 15, CFO Juan Carlos Carpio said during a call on Tuesday after the third-quarter results presentation. The results are the first under the leadership of CEO Víctor Rodríguez, a former academic appointed by Sheinbaum to rescue the world's most indebted oil producer.
“The company also intends to improve its debt maturity profile and does not intend to tap the bond market in the short term.” Its debt amounted to 97 billion dollars in the third quarter, the company reported. For Andrew De Luca, an emerging markets credit analyst at T. Rowe Price, Tuesday's results call had a constructive tone. “The new CEO reiterated many of the previous messages about ongoing state support, but notably differed from the previous administration on issues such as profitability, austerity, better concentration of capital spending, and even private partnerships,” De Luca stated.
