With $13 trillion of investment grade corporate and government bonds having negative yields, fixed income investors are increasingly looking at higher yielding emerging market debt.
Pemex is a state-owned company that manages all of Mexico’s oil and gas sector. The majority of its oil fields are located onshore or in shallow waters, yielding low extraction costs. Yet the company is extremely inefficient and heavily indebted. Both production and proven reserves of oil are declining and the company consistently loses money.