LatinFinance - March/April 2015 - 16
COVER
STORY
The rapid fall in the price of crude oil to below $50 a barrel is reverberating across Latin America, disrupting carefully crafted economic and
corporate plans and stirring up far-reaching shifts in investment and
capital raising. By Katie Llanos-Small and Phil Thornton
Hitting
the
bottom
O
n a chilly day in early December, Pemex's treasurer Rodolfo Campos sat down with the
Mexican company's lenders in New York. West Texas International crude oil was trading
at a little over $63 a barrel, having lost around 40% of its market value in four months.
Campos was in town to discuss a term loan and a contingent line of credit already in place.
"We had in mind supporting our credit rating, particularly with regard to liquidity,"
says Carlos Caraveo, Pemex's associate managing director of finance. "Ratings agencies
base a lot of their analysis on the lines of credit that you have available in the short term."
As the discussions evolved over the coming weeks, the price of crude continued its abrupt slump,
ultimately touching a low of $44 a barrel. Yet, far from finding lending prices higher and negotiations
tougher, Pemex walked away in triumph, extending the maturity for the loan and increasing the amount
of its revolving credit facility.
The oil price plunge has been a sharp reminder of the inherent volatility of commodities markets. It has
forced operators in the oil industry to tear up their forecasts for the year and start again. Policymakers are
doing the same.
And for lenders, shareholders, acquirers and sellers, the uncertainty over the direction of oil is making
pricing deals difficult.
16 L ATINFINA NCE.COM - March/April 2015
http://www.LATINFINANCE.COM
LatinFinance - March/April 2015
Table of Contents for the Digital Edition of LatinFinance - March/April 2015
Contents
LatinFinance - March/April 2015 - Cover1
LatinFinance - March/April 2015 - Cover2
LatinFinance - March/April 2015 - Contents
LatinFinance - March/April 2015 - 2
LatinFinance - March/April 2015 - 3
LatinFinance - March/April 2015 - 4
LatinFinance - March/April 2015 - 5
LatinFinance - March/April 2015 - 6
LatinFinance - March/April 2015 - 7
LatinFinance - March/April 2015 - 8
LatinFinance - March/April 2015 - 9
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LatinFinance - March/April 2015 - Cover3
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