Mexico Is Refinancing Pemex Debt After Getting IMF Reserves

• Mexico has begun a process of refinancing state-owned Petroleos Mexicanos’s debt, after the nation received a transfer of about $12 billion from the International Monetary Fund. 
• President Andres Manuel Lopez Obrador said Monday that refinancing had begun, and restated that he wants to use newly issued IMF reserves to pay debt, but that he couldn’t provide further details. His spokesman Jesus Ramirez confirmed to Bloomberg News that Pemex’s debt is being refinanced. 
• The government is considering whether the $12 billion in IMF reserves could be fully or partially used to pay off Pemex’s debt, according to a person with knowledge of the matter who wasn’t authorized to speak publicly about the topic. 
• AMLO, as the president is known, has prioritized aid to Pemex, seeking to reduce the company’s borrowing costs and free up cash to invest in exploration and production following a decade and a half of output declines. The company currently has $115 billion in debt. 
• If these funds are used to repay a portion of Pemex’s debt it would help to improve the company’s solvency and liquidity position. This will in turn create more room for upstream investment in exploration and production activities to replenish reserves.

(Source: Yahoo Finance & NCBCM Research)