Category: Argentina

ING has agreed to acquire Argentine pension fund Origenes AFJP and annuity company Origenes Seguros de Retiro from Santander and Grupo Bapro for $280m, it says. The deal makes ING the largest pension fund manager and second largest annuity provider in Argentina. ING had agreed to purchase Santander’s Latin American pension business excluding Argentina in July.

The Argentine government is looking to raise at least $250m in 2017 Bonar X today. The 7% notes are dollar-denominated but clearable in pesos or dollars and are offered under local law. Argentina last tapped the 10-year Bonar in May, for $750m to yield of 8.46%. That offering and the current one, expected to price today, are part of a $2.5bn program. Argentina has also offered 7-year and 5-year Bonars.

Fitch has upgraded Argentina’s Transportadora de Gas del Sur (TGS) to B+ from B and Transportadora de Gas del Norte (TGN) to B from B minus. “The local and foreign currency IDR of TGS reflects the company’s moderate business risk profile, the sector’s weak regulatory framework, solid financial position and adequate operations in the gas transportation and gas processing business in Argentina,” says Fitch. “Despite a challenging energy environment, TGN maintains an adequate operating performance and internal cash generation,” it adds. TGN is exposed to a weak regulatory framework, the sector’s underinvestment, and is vulnerable to government interference, and exchange rate and inflation risks, the agency warns.

Argentina’s Banco Macro has pulled a $200m 2014 unsubordinated bond issue amid a lack of interest from investors. It is not clear whether Macro will reattempt a deal this year, if at all, though people close to the issue say the subscription period has been extended for 90 days. Observers attribute failure to launch to yesterday’s poor market conditions, highlighted by a 2.6% drop in the Dow. That Macro has a lot of outstanding debt made it easier to walk away, they added. “I don’t expect a new Argentine issue until the new year,” says a banker away from the deal. Citi and UBS were the leads on the attempted B2/B+ transaction. Macro initially extended the presentation period for the offering of up to $200m in 2014 bonds to November 1 from October 31. The issue, part of a $700m global bond program, was announced October 19. Proceeds were earmarked for extending the loan portfolio and general corporate purposes. Raymond James Argentina was to coordinate the domestic tranche sale. Yesterday, the EMBI Global index widened by 11bp to 212bp over UST, and the CDX8 CDS index widened by 14bp to 164bp over Libor. The Morgan Stanley LatAm Discovery fund, an equity benchmark, fell 2.87%.

Major EM investor Ashmore is upbeat on the prospects for Argentina following the weekend victory of Cristina Kirchner. “We’re very hopeful for the new administration,” Ashmore’s head of research Jerome Booth tells LatinFinance. “The focus has to be on some fiscal reform in the near term,” he adds. “The risk is inflation.” Overall, Ashmore, which looks at EM on a country rather than regional basis, is upbeat about LatAm. “The region looks pretty healthy,” says Booth. London-based Ashmore is a specialist value-oriented EM investor with $33.1bn in assets under management. Since launch in March 2003, AMSF, its multi-strategy fund, has achieved a net annualized return in excess of 18%.

Argentina’s Banco Macro has extended the presentation period for the offering of up to $200m in 2014 bonds due to November 1 from October 31. The issue, part of a $700m global bond program, was announced October 19. Proceeds will go to extending the loan portfolio and for general corporate purposes. Moody’s rates it B2. Citi and UBS are leading the international offering, with Raymond James Argentina coordinating in Argentina.

Cristina Fernandez de Kirchner looked set to breeze through with a victory in Sunday’s Argentine presidential elections, allowing the government to hopefully get back to business. According to Merrill Lynch, issues on the front burner include restoring the room lost in terms of fiscal surplus, tightening monetary policy, focusing on controlling inflation, recovering the role of price signals for the allocation of capital, and improving inflation reporting. “It is key to us to see a reduction of the level of discretion in terms of policy and data reporting,” says Merrill. According to Credit Suisse, transition to a new administration opens the possibility that Argentina will address the issue of holdouts. It predicts that an offer to holders of approximately $19.3bn principal amount could take place late 2008 at “materially inferior” terms to the 2005 swap. Credit Suisse assumes as a base case that holders of the defaulted bonds will receive USD or EUR discounts after a two-thirds haircut and not be offered either accrued interest or GDP warrants. “We estimate that the annualized return will be 9.4% on the USD bonds and 11.2% on EUR bonds. This compares to the current annual yield of 8.80% on the existing discounts, and does not make the untendered bonds particularly attractive given the deal risk,” says the shop. It sees diversification value in defaulted bonds and recommends Argentina 2031s in the model portfolio, owing to liquidity.

Hong-Kong based real estate investor New Times Group Holdings has agreed to acquire two oilfields in Argentina for HKD10bn ($1.3bn). New Times will buy a 30.6% stake in the Tartagal and Morillo concessions from two Hong Kong-based investors.

Peru has no current plans to join the Banco del Sur, the regional development bank being promoted by Venezuela’s Hugo Chavez and to a lesser degree Argentina’s Nestor Kirchner. Colombia, Ecuador, Brazil, Paraguay, Uruguay and Bolivia have pledged their support to the bank, which detractors say is a politically motivated institution destined to fail. “We are not going into the Banco del Sur at the moment. We have other worries on our minds,” José Arista Arbildo, Peru’s vice minister of finance, tells LatinFinance. The bank, seen more as a Chavez political ploy than an answer to pan-regional development, has been in discussion for months, though no firm action appears to have been taken.

Peru has no current plans to join the Banco del Sur, the regional development bank being promoted by Venezuela’s Hugo Chavez and to a lesser degree Argentina’s Nestor Kirchner. Colombia, Ecuador, Brazil, Paraguay, Uruguay and Bolivia have pledged their support to the bank, which detractors say is a politically motivated institution destined to fail. “We are not going into the Banco del Sur at the moment. We have other worries on our minds,” José Arista Arbildo, Peru’s vice minister of finance, tells LatinFinance. The bank, seen more as a Chavez political ploy than an answer to pan-regional development, has been in discussion for months, though no firm action appears to have been taken.