On January 27th, Calyon acted as a Joint Bookrunner (together with HSBC and Citi) in the highly successful USD 2 billion 10-year bond for State Owned Company PEMEX.

The transaction was announced at 10am New York time and within a matter of hours the investor book exceeded USD 6 billion with strong participation from US, European and Mexican investors. The bonds were priced at a slight discount with an 8% coupon to yield 8.25%. The 8.25% yield was at the tight end of the price guidance of 8.25-8.375% and considerably tighter than the announced level of mid-8%. The implied new issue premium for PEMEX was 15 bpsThe basis point (bps) corresponds to a unit of measurement of interest rates. Widely used on the financial markets, this unit is equivalent to a hundredth of point. The variation of interest rates is most of time too small to be stated as points. Therefore, those variations are presented in hundredth of points. (Source: Optim Finance), considerably lower than Mexico’s 45 bps, Brazil’s 60 bps and Colombia’s 70 bps (all three sovereigns executed transactions during the previous weeks).

This is PEMEX’s biggest single tranche transaction in recent years and twice the size of the transactions done by the Republics of Brazil and Colombia. The fact that all the above happened during volatile market conditions and a deteriorating Treasury market emphasize PEMEX transaction an even more outstanding success.

Calyon brought some of the major lead orders of US investors. Calyon was also instrumental in placing 11% with European investors, a relatively high percentage given that the transaction was announced at late afternoon in London and Continental Europe.

Calyon is one of PEMEX’s core banks and has acted as joint bookrunner/lead arranger and administrative agent to some of the Company’s most important syndicated debt financings in the last couple of years. PEMEX and its subsidiary entities deal with several Calyon business lines: Interest Rate Derivatives, Export Finance, Trade Finance, Debt & Credit Market and Treasury Management.

As one of the biggest USD transactions executed by Calyon Americas, PEMEX’s bond continues Calyon’s advancement in the Emerging Markets arena. It provided great visibility by bringing Calyon to #3 in the IFR league tables for all international emerging markets issues year-to-date.