April 9, 2008 / 1:15 PM / 11 years ago

UPDATE 1-Mexico Pemex to issue 5 bln pesos of citizens' debt

(Adds details)

MEXICO CITY, April 9 (Reuters) - Mexico’s oil state giant Pemex would initially issue around 5 billion pesos of citizens’ bonds under a government reform plan, Energy Minister Georgina Kessel said Wednesday.

Mexico’s government handed Congress on Tuesday a compromise energy reform plant that could attract foreign companies to a hunt for new oil reserves to rescue falling output in the world’s No. 5 crude producer.

The initiative would allow citizens to invest in Pemex by purchasing debt bonds whose yields will relate to the monopoly’s performance.

“We are proposing that in the first stage we could issue up to 3 percent of Pemex’s outstanding debt, which is around 5 billion pesos ($474 million),” Kessel told broadcaster Televisa.

Any Mexican will be able to buy the bonds but Kessel said banks and other financial institutions would also be allowed to participate.

“We are also proposing that Afores (pension funds) can invest,” she said.

To avoid extremely wealthy individuals to corner the market on the bonds, Kessel said Mexico’s Finance Ministry will issue rules to curb the amounts that each person can purchase.

“We are establishing limits so that the bonds can be purchased by as many Mexicans as possible,” she said. ($1 = 10.55 pesos) (Reporting by Cyntia Barrera Diaz and Lizbeth Salazar; Editing by John Picinich)

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