LatinFinance - July/August 2014 - 23

those infrastructure projects that are part of
our normal business," he says.
Meanwhile, Alvarado places heavy
stock in the firm's social responsibility
obligations, pointing to a campaign to
encourage good public transport behavior
that it launched with the first line of the
Lima metro system. He also points to the
firm's commitment to transparency as a
reason behind its success in the markets.
"I think that attitude helped us a lot,"
he says. "We believe it's important to be
honest and say what one feels. We go
beyond our contractual obligations." LF

GOOD TIMING: Mario Beauregard,
chief financial officer at Pemex,
says his team keeps a close eye on
markets

HIGH GRADE CORPORATE WITH THE
BEST BOND MARKET STRATEGY

Pemex

Sheer size and its privileged position as
Mexico's sole oil producer have long made
Pemex a favorite among investors. But the
company has not been sitting on its laurels.
Its push to diversify and improve relations
with investors, and its good timing in
coming to the market, have placed it ahead
of its peers.
In a bid to diversify its investor base,
Pemex has knocked on many doors in
the twelve months under consideration.
It has sold bonds in euros and dollars;
it has pleased local investors including
pension funds by playing a bigger role in
the Mexican local market, and it has moved
ahead on the project finance front.
But for Pemex's chief financial officer,
Mario Beauregard, the company's biggest
achievement came in July, when it raised
$3 billion in a multi-tranche transaction,
after building a $12 billion order book. The
deal effectively reopened the dollar market
after a two-month hiatus following Ben
Bernanke's announcement that the US
Federal Reserve planned to gradually close
its quantitative easing program.
"The biggest challenge was volatility,
especially last year, when the Fed
announced that it was going to put an end
to its monetary stimulus," says Beauregard.

©REUTERS

The Mexican oil producer
maintains its solid footing
as it moves ahead with efforts to diversify its investor
base

and of having a good sense of where they
can pick up arbitrage and value in terms of
currencies," says Jose Padilla, head of debt
capital markets at Daiwa Capital markets
in the US.
Pemex was also ahead of
the pack in January this year,
selling a $4 billion tripletranche bond and raising
12.5 billion pesos ($934
million) through a heavilysubscribed triple-tranche
bond sale in pesos and UDIs
shortly after.
Beauregard praised
his team for following
market developments
closely. "There are
Fed announcements,
geopolitical events - all
kinds of things that we
cannot control, and we
have to be very attentive to
the different developments
in the market to be able
to come out when the
opportunity happens," he
says.
Pemex roadshowed in the
Middle East, Europe, US and
Asia, and last year it started
meeting investors in other countries in
Latin America, opening a new front for the
company. "A very important factor is that
we have focused on deepening markets.
We've tried to increase the efficiency of the
curve, increasing liquidity in some points
of the curve, and that gives confidence to
investors. I think it was also a factor for
the investor to feel comfortable with our
paper," Beauregard says.
The energy reforms being implemented
by the government of Enrique Peña Nieto
have been welcomed by the market,
improving Pemex in the eyes of investors.
The reforms may also mean that Pemex's
financing activities become less about
the capital markets, because it will start
teaming up with other companies to
finance new projects.
"I think project financing is going to be
increasingly more important for Pemex,"
says Beauregard. "We will be looking
for partners to forge ahead with certain
activities. It could be pipelines, refineries,
and there could be a lot of activity in the
petrochemical sector. All in all, there
are going to be lots of opportunities for
investments, and project finance is going to
be increasingly important for us." LF

MARIO BEAUREGARD, PEMEX

"WE WERE THE FIRST
LATIN AMERICAN
COMPANY IN THE
DOLLAR MARKET FOLLOWING BERNANKE'S
ANNOUNCEMENT. IT
WAS A SUCCESSFUL
TRANSACTION, BUT A
HUGE CHALLENGE"
"The market practically closed, and
interest rates increased significantly. We
were the first Latin American company
in the dollar market following Bernanke's
announcement.
"It was a successful transaction, but a
huge challenge."
Sources polled by LatinFinance hailed
Pemex for its good sense of timing. "They
have a history of anticipating market trends

July/August 2014 - L ATINFINA NCE.COM 23
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