Petróleos Mexicanos Announces Measures To Strengthen Its Financial Condition

MEXICO CITY, Dec. 6, 2021 /PRNewswire/ -- Petróleos Mexicanos ("PEMEX") announced today a series of measures intended to improve its financial condition, including the commencement of an offering of U.S. dollar-denominated global notes (the "New Money Securities"), subject to market and other conditions, and its intention to conduct a liability management transaction targeting certain series of PEMEX outstanding securities. In addition, the Government of Mexico announced that it will make a capital injection (the "Capital Injection") of up to U.S. $3.5 billion in PEMEX in connection with the liability management transaction discussed above.  PEMEX intends to use the proceeds of the Capital Injection and the New Money Securities to fund the liability management transaction.

The New Money Securities will constitute unsecured obligations of PEMEX and will be jointly and severally guaranteed by Pemex Exploración y Producción, Pemex Transformación Industrial and Pemex Logística, and their respective successors and assignees.

As described above, concurrently with the pricing of the New Money Securities, PEMEX intends to commence a liability management transaction expected to include the following Pemex outstanding securities, in the following priority order:

Proceeds are expected be allocated initially to the Offers to Exchange and any remaining proceeds will be allocated to the Offers to Purchase. The priority order in the Offers is expected to follow the sequence set forth in the tables above.

The liability management transaction does not target outstanding PEMEX securities maturing in 2022 and 2023, given the commitment from the Government of Mexico to ensure budgetary allocations for additional capital injections to PEMEX to cover said maturities.

The newly-issued securities to be delivered as part of the consideration in the Offers to Exchange are expected to have identical terms (other than issue date), be consolidated, form a single series and be fully fungible with the New Money Securities

The Government of Mexico also announced a series of measures already in place and/or expected to be implemented over the coming months, with the goal of improving PEMEX's financial position. These measures include:

1. The reformulation of PEMEX's current 2021-2025 Business Plan, which was approved on March 22, 2021 by PEMEX's Board of Directors, to include detailed actions necessary to strengthen its financial position in the medium and long term, as well as to prepare PEMEX for the challenges the energy sector will face in the following years;
2. The implementation of financial mechanisms and structures to allow for: (i) Public Sector co-investment in exploration and extraction projects to ensure the availability of a robust production platform; and (ii) improvements in PEMEX's debt structure; and
3. Recent changes in PEMEX's corporate structure and management, aimed at achieving the necessary consensus within and outside of PEMEX.

The Government of Mexico's support and capital injection described herein do not involve the Government of Mexico undertaking any obligations to creditors of PEMEX.

The New Money Securities are being offered to qualified institutional buyers in the United States in accordance with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to persons outside the United States in accordance with Regulation S under the Securities Act. The New Money Securities have not been registered under the Securities Act or any state or other jurisdiction's securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The New Money Securities will be issued with registration rights.

This announcement is for informational purposes only. This announcement is not an offer to exchange or purchase or a solicitation of an offer to exchange or sell any securities of PEMEX in any transaction. If commenced, the Offers will be on the terms and subject to the conditions set forth in an exchange and purchase offer statement. The Offers will not be made to holders of securities of PEMEX in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

The New Money Securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, (a) a "retail investor" means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation; and (b) the expression "offer" includes the communication in any form and by any means of sufficient information on the terms of the offer and the New Money Securities to be offered so as to enable an investor to decide to purchase or subscribe for the New Money Securities. Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the New Money Securities or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the New Money Securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

This communication and any other documents or materials relating to the transactions described herein have not been approved by an authorized person for the purposes of Section 21 of the Financial Services and Markets Act 2000, as amended (the "FSMA"). Accordingly, this communication and such documents and/or materials are not being distributed to, and must not be passed on to, persons in the United Kingdom save in circumstances where section 21(1) of the FSMA does not apply. This communication is only being made to those persons in the United Kingdom (i) falling within the definition of investment professionals (as defined in Article 19(5) Financial Promotion Order, (ii) falling within Article 43 of the Financial Promotion Order (non-real time communication by or on behalf of a body corporate to creditors of that body corporate), or (iii) to whom it may otherwise lawfully be communicated by virtue of an exemption to section 21(1) of the FSMA or otherwise in circumstances where it does not apply (all such persons together being referred to as "Relevant Persons"). This communication is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

The New Money Securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the UK. For these purposes, a "retail investor" means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA; or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive (EU), where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering the New Money Securities or otherwise making them available to retail investors in the United Kingdom has been prepared and therefore offering the New Money Securities or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements are information of a non-historical nature or which relate to future events and are subject to risks and uncertainties. No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions. PEMEX undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.

SOURCE Petróleos Mexicanos (PEMEX)

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