Category: Argentina

Argentina is heard to be preparing the next tranche of its Bonar VII debt issue. The sovereign is expected to tap international markets for a further $500 million to take the total issue of the bonds, which mature 2013, to $1.5 billion. The Republic last issued the securities in November when it achieved a yield of 8.03%, but expects to get below 8% this time around. Argentina’s external financing needs in the first quarter of the year total $3.76 billion.

Luxembourg-based Ternium, Latin America’s largest steel group, has increased its stake in Argentina’s steel producer Siderar to 60.9%. It agreed to pay $107.5 million, or $6.376 per share, to Brazil’s Companhia Vale do Rio Doce (CVRD) for its 4.85% share. Ternium is owned by Argentine group Techint.

Structured film financing looks set to become a reality later this year in Argentina, according to reports in the local media. The country’s vibrant domestic film industry is turning to the local capital markets for financing via securitization which offers investors the benefit of no capital gains tax. According to local daily Infobae, InvertFilm I will be the first securitization vehicle to be launched, in February, and will seek to raise $5 million to finance two films. The vehicle securitizes receivables from ticket sales and the sale of foreign rights and other commercialization of the films.

Sempra Energy, the San Diego-based US utility, announced Wednesday it has decided to sell its interests in two Argentine natural gas distribution companies. Sempra owns 37% of Camuzzi Gas Pampeana and 39% of Camuzzi del Sur, both based in Buenos Aires. The decision to sell off the companies was part of a strategy to “shed non-strategic assets”, said the company. The sale will result in a fourth-quarter, non-cash impairment charge of around $200 million, said Sempra.

Argentina’s economy expanded 9.3% in October, compared with the same month a year ago, and was up 0.9% against September. According to INDEC, Argentina’s national institute of statistics, cumulative growth for the first 10 months of the year rose to 8.5% from 8.4% as at September. Industry, agriculture and construction continue to drive growth. The government’s growth forecast of 8.5% this year is looking on target, say analysts.

Argentina’s industrial output was up 1.3% in November against October, on a seasonally adjusted basis, and was up 8.3% compared with the same month last year. Cumulative figures for the year through November showed production up 8.2% versus the same period in 2005, according to INDEC, the country’s national statistics bureau.

Transener, Argentina’s largest electricity provider, sold $220 million of 10-year amortizing bonds at par to yield 8.875% a year. The bonds mature December 15, 2016. The company will use the money raised to fund its buyback of more expensive 2016 bonds. The new 10-year bonds have an average life of 8.5 years and will amortize in equal, annual payments from 2013. The bonds were sold under 144A rules for institutional investors and Regulation S rules for foreign issuers. Deutsche Bank and Citigroup led. The company recently launched a tender offer to buyback around $55 million of the bonds and succeeded in a 72% take-up by bondholders.

Argentina’s economy grew by 8.7% in the third quarter of the year, continuing to beat analyst forecasts. Growth was driven by increased production of goods (+9.4%) and services (+8%). Third-quarter growth was also up 2.6% against the previous quarter. In cumulative terms, the economy has expanded by 8.4% since the beginning of the year.

Ecuador’s president-elect Rafael Correa’s comments to press in Argentina Thursday sent Ecuador’s sovereign bond prices tumbling and the yield on the country’s global 2012 bonds up to 13.8%. The spread on the country’s dollar bonds widened to 637bp following the president’s remarks. In response to a question on his nation’s $10 billion foreign public debt, Correa reiterated his plan to restructure Ecuador’s commercial, bilateral and multilateral debt, and said he hoped the process would be “amicable”. The debt represents 25.3% of GDP; debt service payments represent 6% of GDP, a level that Correa says means Ecuador is “unable to develop”. Ecuador last defaulted on debt in 1999 when it stopped payments on $6.5 billion of government bonds traded internationally. However, analysts remain confident that this time Ecuador will not default but rather restructure.