US Export-Import Bank (US Exim) has authorised US$1.2bn in guarantees and direct loans to Mexico’s national oil and gas company Petroleos Mexicanos (Pemex).
The loans, provided by Crédit Agricole Securities, Goldman Sachs and JP Morgan as joint book runners, will fund four Pemex facilities, including a US$200mn loan to support exports from US small businesses and a US$100mn loan for the Cantarell project, Mexico’s largest oil field.
It will also finance a US$400mn loan for the Pemex’s strategic gas programme, one of Mexico’s largest gas programmes, and a US$500mn loan for the Pemex Exploration and Production (PEP), a programme devoted to onshore and offshore oil and gas exploration ventures.
Law firm Milbank, Tweed, Hadley & McCloy represented the underwriters in the four transactions, which all have a 10-year repayment term.
“It marks the first time the government-backed export credit agency is backstopping a capital markets transaction that doesn’t involve the purchase of a Boeing aircraft,” Milbank says.
The facilities will enable the American exporters involved, most of which are headquartered in Texas, California, and Louisiana, to supply their products, equipment and services to these Pemex oil and gas projects, US Exim says in a statement.
Under the loan agreement, Pemex will for the first time offer US Exim-guaranteed bond issuances to the capital markets, in order to raise additional funding for their transactions. Pemex expects to raise four to seven bond offerings that will occur from June to September 2012.
Pemex is US Exim’s top borrower, and since 1998, the bank has approved approximately US$10.6bn in financing to support Pemex’s activities in the oil and gas sector.
This latest loan to Pemex will increase US Exim’s total credit exposure in Mexico to US$6.3bn.