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Mexico cuts Pemex debt by $ 3.2 billion

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The Mexican government says it has reduced the debt burden of its state oil company, Troleos Mexicanos (Pemex), by $ 3.2 billion through a refinancing operation.

The government has replaced the debts in short-term, with a new bond with a 10-year maturity, and has refinanced some medium-term debts, according to a statement from the Ministry of Finance.

The ministry said the process will reduce the “financial pressure” on Pemex by $ 10.5 billion between 2024 and 2030, adding that the refinancing will not reduce the budget financial, according to “Bloomberg” and seen by “Al Arabiya.net”.

The government contributed $ 3.5 billion to the financing, which helped reduce the spread on government bonds by 50 basis points and cut Pemex’s annual finance costs by $ 180 million.

Mexican President Andres Manuel Lopez Obrador announced a capital injection of $ 3.5 billion in Pemex in early December, claiming it would take place through a series of bond market transactions. This is in addition to last year’s initiatives to reduce taxes and restructure the management of the company.

Pemex faces losses due to debt size of $ 113 billion, in as the largest of the world’s leading oil producers, as the company seeks to reverse the decline in crude oil production over a decade and is heavily dependent on the federal government’s willingness to continue paying bondholders.

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