Category: Argentina

Barclays recommends a long position in Argentine GDP warrants, predicting an upswing in industrial activity following the end of winter. “We believe that the USD GDP warrants offer attractive entry levels – they are down more than 10% from the May peak – which also suggests to us that they have already priced in the potential downside risk to growth due to the energy crisis,” says the shop. Barclays was one of three banks advising on the sovereign’s $100bn restructure that spawned the warrants in 2005.

Argentina has announced it is to build two new hydroelectric plants in Patagonia, in the south of the country. The project is set to cost $1.5bn and will generate up to MW2,000, according to President Nestor Kirchner, who unveiled the tender in Santa Cruz province on Friday. Argentina is facing an energy crisis at the moment with severe weather prompting the government to impose rationing on some industrial and business customers to ensure residential consumers are supplied.

Former Argentine economy minister, Roberto Lavagna, has officially launched his bid for the presidency in this year’s October elections. Lavagna, who managed the economy from the start of 2002 until he resigned in November 2005, has criticized Kirchner’s heterodox policy of price agreements as well as the government’s change in methodology to calculate inflation. He has said he believes inflation to be well above official figures. On October 28, Lavagna will face President Kirchner’s wife, Senator Cristina Fernandez de Kirchner, who last week launched her presidential campaign.

Argentina’s Banco Patagonia has raised ARP806.6m ($260m) via the sale of 75m new shares and 125m existing shares on the Buenos Aires stock exchange, according to a document filing late Wednesday. The bank is also planning to list Brazilian Depository Receipts on the Bovespa soon.

Argentine gas distribution company Metrogas has appointed Andres Cordero as interim director general to replace Roberto Brandt who was ousted by the government earlier this month for his “lack of skill” in managing the concern. Cordero comes from managing a gas pipeline in the south – Gasoducto Cruz del Sur. Brandt will, reportedly, take Cordero’s place at Gasoducto Cruz.

Argentine private equity firm Pampa Holding, a subsidiary fund of Dolphin Capital focused on the power sector, is planning to offer up to 480m new shares, according to documents issued by some of its portfolio companies. The company’s stock closed at ARP2.97, which would result in a maximum ARP1.42bn ($468m) raise. The part owner of Transener, Edenor and a slew of other Argentine energy companies went public in 2006.

Argentine economic policy is not likely to change under new economy minister Miguel Peirano, say Wall Street analysts. Peirano replaces Felisa Miceli, who resigned this week amid an investigation into cash found at her office. Peirano was secretary of industry since 2005, has close links with the industrial sector and has also worked as chief economist of the industrial union, according to Goldman Sachs. “We do NOT expect the new Minister of Economy to introduce any changes in the government’s economic policies. In particular, we believe that Minister Peirano will be supportive of maintaining the weak ARS policy,” says Goldman. “We expect the government’s weak peso policy and generous electoral spending to remain unchanged,” says Credit Suisse. “The fact that Peirano is not seen too close to interior commerce secretary Guillermo Moreno, the man perceived by the media to be behind the methodological changes at INDEC, could be a relief for inflation-linked debt,” says Merrill Lynch. The change is not good for the president, whose wife is embarking on a bid for the presidency in October elections. “Miceli’s departure is an important political setback for the government, as it comes only three days before the formal launch of Cristina Kirchner’s presidential campaign,” says Credit Suisse.

Argentine power distributor Edenor may price its high-yield style offering of $220m in 10-year non-call 5 bonds (B2/B) as early as today. The company issued guidance of 9.250%-9.375% for the 144a/Reg S offering, whose proceeds will be used to take out existing 2014 bonds and for capex. A European and US roadshow is set to end today. Citi and Deutsche are leading.

Argentina’s economy minister, Felisa Miceli, has resigned after mounting pressure to step down following the discovery of $63,000 in cash stored in her office. Miceli had refused to discuss the matter but was summoned by a federal prosecutor Monday to make a statement regarding the origin of the money. The money was originally discovered in a routine security search of the minister’s office.

Market conditions are less than ideal, with LatAm bonds wider and the tone jittery, as a number of issuers proceed with roadshows for deals scheduled to price this week. Argentina’s Edenor is shopping a $220m 10-year non-call 5 144s/Reg S bonds issue (B2/B) to high-yield institutionals in London and New York via Citi and Deutsche Bank. Mifel, a Mexican bank, last week launched a European roadshow for $100m in perpetual bonds. The tour hit London yesterday and will come to the US this week, with Deutsche leading. Meanwhile, City of Bogotá wraps up a roadshow for $300m equivalent in 2028 COP-denominated notes Thursday in Boston. Leads Citi and Deutsche have not yet issued guidance.