Category: Argentina

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.

The IFC, the private-sector arm of the World Bank has granted a $550m loan to the Argentina’s energy firm Pan American Energy. The loan comprises a $150m tranche due 2018, and a $400m tranche – raised by the IFC from a group of commercial banks – $158.2m of which is due in 2014, and $241.5m of which is due in 2015. The money will be used towards an $858m investment in the Cerro Dragon oil and gas field, in the southernmost provinces of Chubut and Santa Cruz. Pan American, a joint venture between BP plc and Bridas Corporation, is Argentina’s second-largest oil and gas producer, accounting for about 17% of the country’s output.

Persisting cold weather has heightened Argentina’s energy crisis and things took a turn for the worse Wednesday. The government ordered a stop to natural gas exports to Chile and told oil companies to halt the sale of natural gas to vehicles at filling stations. Cities like Bariloche were out of power for 14 hours, according to a Goldman report, which notes the abnormal temperatures, while damaging in the short term, may not have a major economic impact in the long run, and should shave but a few decimal points off GDP, expected to top 7% this year.