The 8 percent dollar-denominated securities maturing in 2019 from the largest oil producer in Latin America are yielding 64 basis points above sovereign bonds with the same maturity. A “fair value” for Pemex yields would be as little as 12 basis points higher, said RBC analyst Eduardo Suarez, who is based in Toronto and rates the state oil company’s debt “outperform.”

“With the rating downgrade uncertainty out of the way, we think they offer an attractive pick up relative to Mexico sovereigns,” Suarez said in an interview last week.

The 2019 bonds have fallen 2.8 cents on the dollar since Nov. 23, the day Fitch reduced its rating on Mexican sovereign bonds. S&P cut its rating on Dec. 14. Pemex 2019 bonds now yield 5.71 percent, compared with 5.07 percent for 10-year sovereigns.

from – bloomberg.com