Cleary Gottlieb is representing long-time client Petróleos Mexicanos (Pemex), the Mexican state oil company, in its $4 billion Rule 144A/Reg S debt offering with registration rights, and in two concurrent liability management transactions.
Pemex’s debt offering of 5.350 percent notes due 2028 and 6.350 percent bonds due 2048, under its medium-term notes program, launched and priced on February 1, 2018. The liability management transactions also launched simultaneously on February 1, 2018.
The first liability management transaction consisted of abbreviated five-day offers to exchange two series of its outstanding debt securities for approximately $1.8 billion in additional 6.350 percent bonds due 2048, for a total aggregate principal amount of approximately $5.8 billion of new securities. In order to comply with rules applicable to abbreviated exchange offers, Pemex also conducted concurrent retail offers to purchase for cash the same series of its outstanding debt securities subject to the exchange offers. The debt offering, the abbreviated exchange offers, and the retail tender offers closed on February 12, 2018.
Abbreviated exchange offers are a new structure that was first sanctioned by the SEC in 2015. Traditional exchange offers are required to be open for 20 business days, but the new structure (which is described in a no-action letter requested by a group of law firms, including Cleary) is only required to be open for five business days which minimizes an issuer’s exposure to market volatility. This exchange offer is only the third exchange to utilize the new no-action letter. Cleary advised the issuers in the only two other similar transactions to date.
The second liability management transaction consists of private offers to purchase for cash five other series of Pemex’s outstanding debt securities, which include a waterfall feature prioritizing the purchase of certain of the series subject to the offers. These private tender offers are scheduled to expire on March 1, 2018.
The securities issued pursuant to the debt offering and the exchange offers will be listed on the Luxembourg Stock Exchange and admitted to trade on the Euro MTF market of the exchange.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and SMBC Nikko Securities America, Inc. acted as joint managers for the debt offering. Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as dealer managers in connection with the liability management transactions.