Pemex Triggers Divide as Swaps Traders Clash With Moody's, S&P

When it comes to Mexico’s struggling state oil company, ratings companies and Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term traders are growing further apart.

The latest split surfaced after Petroleos Mexicanos said March 8 it obtained a credit line for up to 15 billion pesos ($845 million) from state banks to make Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term to suppliers. Moody’s Investors Service called the plan “credit negative,” while Standard & Poor’s analyst Sebastian Briozzo warned Monday that Pemex’s rating may continue falling.

Nevertheless, the loan is adding to bond-investor optimism that Pemex is on the path to restoring its finances after plunging output and oil prices battered the company and triggered a downgrade. Its five-year credit-default swaps have dropped 9 percent to 344 basis points since March 8, part of a broader decline from a seven-year high in January as the oil producer slashes spending and the government pledges financial support. Pemex’s bond risk may fall to as low as 300 basis points as oil rebounds, said Alejandro Urbina, a money manager at Silva Capital Management LLC.

“We’ve come off the bottom,” he said. “The correction in oil and the government’s recent announcement came pretty close to each other. It’s a two-fisted punch that improves Pemex’s outlook.”

To contact the reporter on this story: Ben Bartenstein in New York at bbartenstei3@bloomberg.net. To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net, Michael Tsang at mtsang1@bloomberg.net, Lester Pimentel, Rita Nazareth

By: Ben Bartenstein

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