Category: Argentina

Spanish-Argentine oil producer YPF Repsol has confirmed its plans to sell up to 45% of the Argentine unit, YPF, in a filing with the local stock exchange. Earlier this year the company said it was considering floating between 15% and 20% of its Argentine business on the local stock exchange, although it made clear that the company would “maintain a clear majority stake in YPF” and that the sale of its capital in the company, under optimal conditions, would be aimed at private investors.

Argentina’s Banco Hipotecario plans to price next week a $200m issue of 3-year peso-linked notes. The deal will follow in the footsteps of Banco Macro, which sold $100m in 5-year peso-linked debt last week, and Banco Rio, which priced a deal in early May. A roadshow will begin this week in Europe and end on the East Coast next week. Deutsche and Citi are leading.

Carlos Ingham, country head of Argentina, Chile and Peru at JPMorgan Chase in New York will be leaving the bank in a few months, according to a report by Bloomberg. Ingham has been with the bank for the past 18 years. No replacement for Ingham has yet been announced.

Paraguay has appointed Paul Sarubbi to replace Angel María Recalde as the country’s chief executive in its Yacyretá hydroelectric plant on the Paraná river, jointly owned and run with Argentina. The management change is part of a wider reshuffle of government posts in an election year.

Argentina’s would-be bond issuers are heard to have been told to wait two weeks before coming back to the CNV, the local securities regulator, with their local debt plans. Amid a flurry of filings, lawyers representing issuers have reportedly been told to hold off. Among the casualties are Banco Patagonia and utility Edesur’s up to ARP600m issue through JPMorgan, both stalled. However, the CNV denies issuing an unofficial two week moratorium on peso-denominated offshore issues. The official line from the regulator is that it is requesting more information on some of the deals. A local attorney speculates that the move could be an attempt by the government to minimize upwards pressure on the peso with the inflow of dollars from local currency issues. There is also speculation that Argentina wants to keep the market clear for a peso denominated issue rumored to be readying for next week. The government apparently wants to raise up to $500m in peso-denominated fixed rate local bonds.

Foreign investors just can’t get enough of Argentine corporate risk, panelists at LatinFinance’s fourth Cumbre Financiera Argentina in Buenos Aires said yesterday, as an offshore market in fixed rate five year peso bonds flourishes. Ronaldo Strazzolini, head of corporate finance at Citi, says Argentine blue chips can expect to raise 10-year bullet financing in the high yield US market and tap a growing peso offshore market for Argentine companies for five-year fixed rate money. Gabriel Blasi, CFO of Grupo Irsa, notes that Argentine political risk ranked low on the list of investor concerns on roadshows for issues in February and May. By contrast, local investors have scant appetite for Argentine assets in the real estate and agribusiness sectors, he says, and their appetite for equity is even more anemic. Blasi predicts that more Argentine companies will beat a path to Brazil’s Bovespa to raise equity capital as Argentina’s equity market continues to wither. A clear regulatory framework, deep secondary market liquidity and decent valuations make listing in Brazil more attractive. Irsa listed its subsidiary on the Bovespa to expand agribusiness into that country. Banco Patagonia is said to be preparing to list shares on the Bovespa, in coming weeks with JPMorgan advising.

Argentine banks are scrambling to issue peso-linked debt in the hopes of raising inexpensive funding from this hot market. On Thursday, Banco Macro clinched $100m worth of 5-year peso-linked notes at par to yield 10.75%, the tight end of 11% area price guidance. Tarjetas Cuyanas, a credit card issuer, also announced an offering Wednesday of $65m worth of 2012 amortizing peso-linked notes, set to price next week. Roadshows are scheduled for New York and London. Banco Galicia, 60% owner of Cuyanas, and Barclays have joint books. Bankers report a robust pipeline of three to five year fixed rate peso issues in the offing. Among deals rumored to have been stalled by the moratorium is a $200m equivalent peso-linked offering from Banco Hipotecario, via Citi.

Foreign private equity is on the hunt for Argentine firms in the agribusiness, real estate, meat production and infrastructure sectors. They see value in small typically family-owned companies that could tap growing appetite from Asia, in particular China, but have limited access to local and offshore capital, says a Buenos Aires based investment banker. Private equity firms from the US and UK are keen to partner with Argentine private equity firms to soften up local companies resistant to sourcing foreign capital, six years after Argentina’s economic crisis. The banker says private equity firms are keen to use leveraged finance as a way to achieve scale for these small companies. “They could easily leverage companies up three times with the cashflow and match it with hedge fund money from the US to gain scale,” he adds.