Category: Argentina

Transportadora de Gas del Sur (TGS), the Argentine gas transmission company, says just over 70% of its creditors have taken up its offer, launched earlier this month, to buy back its 2010 and 2013 bonds. The bonds were originally issued in connection with the company’s debt restructuring in 2004 when it exchanged just over $1bn in debt for the new bonds. The company expects to spend up to $424 million to repurchase the debt which it will fund with a $500 million bond issue on June 15. The buyback offer expires on May 7; the early deadline was April 23.

The equity offering of Argentine electricity distributor Edenor, will enable selling shareholders EDF International and New Equity Ventures, partly owned by Argentine private equity firm Dolphin Group, to reduce their stakes in the company from 25% and 14% respectively to 3.2% apiece. Edenor will offer 15.2m ADSs, representing 303,295,943 Class B common shares in an international offering, through underwriter Citi and JPMorgan Thursday, and 81,411,020 Class B Shares in a domestic offering in Argentina through Raymond James Argentina. The price range is $16-18. Based on a $17 mid-range price, the combined international and domestic offerings could raise $329m and $378.9m, if the 15% over-allotment option is exercised. This is slightly more than what we reported Tuesday, following an update from Dealogic. Edenor has 30 days to exercise the greenshoe. Edenor will use proceeds of its upcoming equity offering to repay debt, for capital expenditures and general corporate purposes.

Petrobras Energia, which is preparing to issue $300m in 10-year notes via HSBC and Morgan Stanley, will conduct two days of roadshow presentations in Argentina Thursday and Friday. The bonds are expected to price next week and will also be sold to foreign investors.

Alto Palermo (APSA), a developer of malls in Argentina, is in the market with a two-part bond offering totaling $170m. The company is looking to issue $120 million in USD-denominated 10-year bullet bonds, and $50 million worth of peso-linked 5-year bonds that amortize in the final 2.5 years. Citi and Standard Bank are leading the offering, which will start marketing this week and could price by the end of next week. The 10-year could clinch a yield of around 8%, according to an analyst familiar with the deal. Last year, IRSA, a developer of residential and office properties which has a stake in APSA, issued $150m in euro-denominated 10-year bonds that captured an 8.5% coupon. The IRSA notes are rated B by Fitch, and the APSA notes have received a B+ rating based on the better risk profile of the company.

Argentina’s Banco Rio has narrowed price talk on a $150m 3-year peso-denominated bond to 11.625%, from initial whispers of 12.250% and then 12.000%. Some bankers say pricing could come even tighter, while others say the limit has been reached. The book for Rio is heard to be large, supported by the expectation that the Argentine peso will at worst remain stable for the next three years, and possibly even appreciate. Also supportive is the fact that the economic outlook for Argentina in the coming few years is rosy and relatively predictable. Ownership by Banco Rio is another positive, along with the Argentine peso issue’s scarcity value. Citi is leading.

Argentina’s president, Nestor Kirchner, has struck a deal with six of the country’s trades unions to agree a wage increase of 16.5%. Experts say that once benefits and extras are taken into account, the pay rise is nearer 20%. Ten more unions will follow suit to secure the higher income, say analysts, in a move that will add to inflationary pressures. The country’s national statistics bureau INDEC reported annual inflation of 9.1% in March.

Argentina’s Banco Rio is looking to wrap up its roadshow in the US this week and price up to $150m worth of peso-denominated local 3-year bonds. While whispers were floated out at over 12% last week, some bankers away from the deal expect the offering could price through 12%, as demand is strong. Citi and Santander are leading. Banco Macro is also heard preparing a similar offering following Rio.

Argentina has appointed Alejandro Barrios to run country’s national statistics bureau INDEC. He replaces Mario Krieger who has been the interim head since mid-March when Lélio Mármora resigned for health reasons. Barrios had been director of coordination and statistical planning at the Bureau. Ana María Edwind, currently head of human resources at the agency, was named deputy director and will be responsible for statistics, replacing Clyde Trabuchi who resigned. Commenting on the appointments, Goldman Sachs said it regarded the move to restore INDEC’s eroded credibility as a positive one. However, it said it was still too early to judge whether the issue of alleged interference of the ministry of economy in calculating inflation had been addressed. Workers at INDEC have been protesting since January after the replacement of Graciela Bevacqua, the head of the consumer price index team, who was substituted by government-appointed Beatriz Paglieri. They claim the government has intervened to amend calculation methodology and replaced those opposed to the move.

A forthcoming offering by Argentina’s Banco Rio of up to $150 million in three-year bonds, denominated in Argentine pesos, is heard to have been whispered in the 12.25% area, according to bankers away from the deal. The offering, being led by Citi, is expected sometime next week.

The role and mission of an eventual Bank of the South has become a point of contention between the South American nations hoping to participate in its creation. Venezuela and Argentina envision an IMF-like entity that can bail out countries with fiscal problems, while Brazil, a more recent adherent, wants it to help finance infrastructure projects around the region. The Brazilian president’s secretary on international issues, Marco Aurélio Garcia, says Brazil won’t participate in a pre-formulated effort to set up the bank. “We want to be involved in the formation process of this,” he was quoted as saying in local press. Garcia also suggested the need to “tear up” the agreement made between Argentina and Venezuela in order to start afresh and accept interested parties like Brazil, Bolivia and Ecuador. Bankers doubt that the politically-motivated organization will fly in its current form.