Ritch Mueller advises on a landmark sovereign transaction of USD$12 billion

Ritch Mueller acted as Mexican counsel to the initial purchasers — BofA Securities, Citigroup Global Markets and J.P. Morgan Securities — in a landmark USD$12 billion transaction involving the first-ever issuance of pre-capitalized securities (P-Caps) by a sovereign. 

 

The offering, carried out through a Luxembourg special purpose vehicle and supported by the United Mexican States, is part of a broader set of measures designed to reinforce Petróleos Mexicanos’ (PEMEX) financial position. 

 

Beyond the P-Caps issuance, the transaction also included the execution of Global Master Repurchase Agreements (GMRAs), a Global Master Securities Lending Agreement (GMSLA), and a Total Return Swap entered into with the three banks in connection with credit facilities provided to PEMEX. Together, these arrangements allowed the proceeds to be efficiently deployed into U.S. Treasuries and monetized through repo transactions, while providing PEMEX with fresh liquidity. 

 

Our team advised the banks on all Mexican law aspects of this multifaceted structure, including the enforceability of Mexico’s contingent obligations, the treatment of securities lending and repo transactions under local law, and the implementation of derivatives linked to PEMEX’s financing.
 

 

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