{"id":18941,"date":"2016-03-17T10:42:38","date_gmt":"2016-03-17T15:42:38","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18941"},"modified":"2016-03-17T10:43:11","modified_gmt":"2016-03-17T15:43:11","slug":"big-oil-bailout-begins-as-debt-spirals-down","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18941","title":{"rendered":"Big-Oil Bailout Begins as Debt Spirals Down"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/03\/16\/big-oil-bailout-begins-as-pemexs-debt-spiral-deepens\/\" target=\"_blank\">Big-Oil Bailout Begins as Debt Spirals Down<\/a><\/h3>\n<p class=\"entry-meta\"><strong>Mexico\u2019s proud sugar daddy becomes giant\u00a0financial sinkhole.<\/strong><\/p>\n<\/header>\n<div class=\"entry-content\">\n<p>Pemex, Mexico\u2019s state-owned oil giant, cannot seem to get a break these days. It\u00a0notched up 13 straight quarters of rising losses. It now owes over $80 billion to international investors and banks. It needs to\u00a0raise $23 billion this year to stay afloat.\u00a0The cost of servicing that gargantuan debt mountain continues to rise. So it\u00a0tries desperately to rein in its spending, without tackling \u2014 or even discussing \u2014 its endemic culture of corruption.<\/p>\n<p>In recent days,\u00a0Pemex received a 15 billion peso ($840 million) lifeline from three of Mexico\u2019s homegrown development banks, Banobras, Bancomext and Nafinsa, to help the firm pay back some of its smallest providers, consisting mainly of domestic SMEs.<b><\/b><\/p>\n<p>The loan was part of an arrangement cobbled together between the banks and the Mexican government. By today\u2019s standards the amount involved is pretty meager, but the operation was about more than just raising funds: it was meant to restore confidence among both investors and suppliers in the firm\u2019s ability to repay its debts.<\/p>\n<p>\u201cThis sends a sign of stability and confidence to the sector, which has been very nervous\u201d payments would not be made, explained Erik Legorreta, President of the Mexican Oil Industry Association, which represents around 3,000 service providers. \u201cMembers of the industry now have the confidence and certainty that the payments will be honored.\u201d<\/p>\n<p>Not everyone agrees. Last week the U.S. credit rating agency Moody\u2019s\u00a0<a href=\"http:\/\/www.elfinanciero.com.mx\/economia\/banobras-bancomext-y-nafinsa-en-riesgo-por-prestarle-a-pemex.html\" target=\"_blank\">flagged concerns<\/a>\u00a0that the loan will significantly increase the three banks\u2019 combined exposure to Pemex\u2019s debt, calculated to grow from 44% to 62%. \u201cThe three lenders now have high concentration risks with their 20 biggest creditors,\u201d cautioned Moody\u2019s, which already downgraded Pemex\u2019s debt in November to Baa1, with a negative outlook. In its report last week, the agency piled on the pressure by warning that there\u2019s \u201c<a href=\"http:\/\/www.jornada.unam.mx\/2016\/03\/15\/economia\/025n2eco\" target=\"_blank\">a high likelihood<\/a>\u201d that it will downgrade Pemex\u2019s rating another notch in the coming weeks.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Big-Oil Bailout Begins as Debt Spirals Down Mexico\u2019s proud sugar daddy becomes giant\u00a0financial sinkhole. Pemex, Mexico\u2019s state-owned oil giant, cannot seem to get a break these days. It\u00a0notched up 13 straight quarters of rising losses. It now owes over $80 billion to international investors and banks. It needs to\u00a0raise $23 billion this year to stay [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2688,12992,195,5660,517,1729,2174,4255],"class_list":["post-18941","post","type-post","status-publish","format-standard","hentry","category-economics","tag-big-oil","tag-big-oil-bailout","tag-debt","tag-don-quijones","tag-mexico","tag-oil-and-gas-industry","tag-pemex","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18941","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18941"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18941\/revisions"}],"predecessor-version":[{"id":18943,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18941\/revisions\/18943"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}