德银墨西哥能源行业个股PemexCF动力充足但大选之下相关行业降级为持有20171101Deutsc

DeutscheBankMarketsResearchEmergingMarketsMexicoIGCorporateCreditEnergyCompanyPetroleosMexicanosDate1November2017PositiveCFMomentum;ButMoving10YSectortoHoldonElectionNoise________________________________________________________________________________________________________________DeutscheBankSecuritiesInc.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.EduardoVieiraResearchAnalyst(+1)[e-mail]alyst(+1)[e-mail]3Q17resultsshowedcontinuedrefiningmarginimprovementaswellaslowerpricediscounttoBrentandlowereffectivetaxburden,whichmorethanoffsetfallingE&Pproductionandhigheroverheadexpenses,withtherecurringcashburnimprovingbyUSD0.85bnqoq,toUSD-0.99bn;netleverageex-pensions(DB-adjusted)improvedby0.3xqoq,to3.7x.Otherpositivehighlights:increaseindrillingrigs,fivenewoildiscoveries,twoonshorefarm-outsawarded,aretroactivefiscalbenefitgrantedinAugust,andaUSD231mndivestment(pipelinestake).Weexpectcashflowtoremainmorestable,withlimitedcorrelationtointernationaloilpricesandE&Pproductionintheneartermduetohightaxburden(mostlytop-linedbased);keyupside/downsideriskstoourbase-caserevisedcashburnestimateofUSD1.0-2.0bn/yearincludethetrajectoryofcosts/expensesanddomesticfuelpricesuponachangeofgovernment.GivenPemex’sbonds’high-betanaturehistoricallyandtherecent(sooner-than-anticipated)spikeinelection-relatednoiseandmarketvolatility,weprefertotakeamoredefensivestanceonthem(despitepositivefundamentalmomentumwiththecurrentgovernmentadministrationandpositiverelativevaluewithinEMcredit)inlightoffuturebudgetinganddomesticfuelpricepolicyuncertainty(associatedwithmid-2018elections)andthusdowngradePEMEX6.875%‘26sand6.5%‘27stoHoldfromBuy,whilereiteratingourHoldrecommendationontheotherPEMEXUSDunsecurednon-callablefixed-ratebondswithatleastUSD500mnofamountoutstanding,andourSellrecommendationonPEMEXperpetualbonds,duetolimitedoption-adjustedrelativevalue(toduration)comparedtootherPEMEXbonds.WithinthePEMEXcurve,wehaveapreferenceforlower-betashorter-durationbondsdue2021and2022.Keyriskfactors:1)exposuretointernationaloilprices(althoughlargelymitigatedbyahightaxburdenappliedmostlytotheE&Psegment’stopline);2)negativemomentumonE&Pproductionandrefineryoutputduetolowcapex;3)highindebtedness(USD106bninterest-bearingdebtandUSD175bnincludingpensiondebt,3.7xinterest-bearingnetdebttoLTMcashoperatingincomebeforealltaxes);4)recurringcashburn(USD0.5-3.5bn/yearforecastfortheupcomingyearsforBrentrangingfromUSD35/bbltoUSD60/bblandproductiondepletionrangingfrom2%p.a.to12%p.a.,assumingflatrefiningspreads);5)budgetanddomesticfuelpolicyuncertaintyassociatedwithMexicanpresidentialelectionsinJuly2018;and6)generalrisksforEMcredit,includingtighterinternationalfinancingconditionsasDMcentralbankspreparetounwindultra-easypolicy,aswellaspotentialoutflowsfromEMbondsasDMrelationtakesplace.Distributedon:02/11/201703:03:28GMT0bed7b6cf11c1November2017IGCorporateCredit,EnergyPetroleosMexicanosDeutscheBankSecuritiesInc.Page2BondTableandCurrentBondRecommendationsFigure1:PemexbondsratedbyDeutscheBankPemexMaturityAmtO/S*Mdy/S&P/FitchDBCurrentRec.**DBPreviousRec.***MidPriceMidYieldZSpreadSpdtoSovModDurPEMEX5.500'194-Feb-19741Baa3/BBB+/BBB+HOLD/Dec23,2016NA103.852.3666321.2PEMEX8.000'193-May-191,312Baa3/BBB+/BBB+HOLD/Dec23,2016NA108.602.144071.4PEMEX6.000'205-Mar-20995Baa3/BBB+/BBB+HOLD/Dec23,2016NA107.102.8497502.2PEMEX3.500'2023-Jul-201,455Baa3/BBB+/BBB+HOLD/Dec23,2016NA101.752.8391382.6PEMEX5.500'2121-Jan-212,962Baa3/BBB+/BBB+HOLD/Dec23,2016NA106.503.35138772.9PEMEX6.375'214-Feb-211,248Baa3/BBB+/BBB+HOLD/Dec23,2016NA108.903.46149862.9PEMEX4.875'2224-Jan-222,097Baa3/BBB+/BBB+HOLD/Dec23,2016NA104.153.80174973.8PEMEX5.375'2213-Mar-221,500Baa3/BBB+/BBB+HOLD/Dec23,2016NA106.303.79173943.9PEMEX3.500'2330-Jan-232,100Baa3/BBB+/BBB+HOLD/Dec23,2016NA97.803.97184964.7PEMEX4.625'2321-Sep-232,051Baa3/BBB+/BBB+HOLD/Dec23,2016NA102.584.131991025.1PEMEX4.875'2418-Jan-241,499Baa3/BBB+/BBB+HOLD/Dec23,2016NA102.784.362211195.3PEMEX4.250'2515-Jan-25997Baa3/BBB+/BBB+HOLD/Dec23,2016NA98.784.452251146.1PEMEX4.500'2623-Jan-261,487Baa3/BBB+/BBB+HOLD/Dec23,2016NA99.034.642401186.7PEMEX6.875'264-Aug-262,970Baa3/BBB+/BBB+HOLD/Nov1,2017BUY/Jul20,2017112.585.082821516.6PEMEX6.500'2713-Mar-275,500Baa3/BBB+/BBB+HOLD/Nov1,2017BUY/Jul20,2017109.455.212921577.0PEMEX6.625'3515-Jun-352,749Baa3/BBB+/BBB+HOLD/Dec23,2016NA105.656.1036317010.3PEMEX6.500'412-Jun-413,000Baa3/BBB+/BBB+HOLD/Dec23,2016NA101.756.3638516611.8PEMEX5.500'4427-Jun-442,658Baa3/BBB+/BBB+HOLD/Dec23,2016NA90.706.2236914713.0PEMEX6.375'4523-Jan-453,000Baa3/BBB+/BBB+HOLD/Dec23,2016NA99.706.4038815812.6PEMEX5.625'4623-Jan-462,993Baa3/BBB+/BBB+HOLD/Dec23,2016NA91.306.2937614913.2PEMEX6.750'4721-Sep-475,998Baa3/BBB+/BBB+HOLD/Dec23,2016NA103.106.5140015912.9PEMEX6.625Perp28-Sep-491,000Baa3/BBB+/BBB+SELL/Dec23,2016NA101.386.5840616213.1Source:DeutscheBank.Pricingisindicative(midside),asof10/31/17.*AmountoutstandinginUSDmillions.**Current/newDeutscheBankrecommendation