Category: Argentina

The government of the Province of Buenos Aires sold $475 million of 12-year government bonds at a yield of 9.75 percent on Tuesday, the first time the province that includes the Argentine capital had sold debt since the 2002 default. The lead manager of the issue was Merrill Lynch, which had expected a yield as high as 10 percent for the bonds.

Pluspetrol, an Argentine oil company, will resume pumping 50,000 barrels a day of oil after reaching agreement with Achuar Indians in Peru, who blocked company installations for 13 days to complain about environmental damage. Pluspetrol agreed to pay $12.4 million for a local health plan and contribute $1.2 million a year towards building a local airport. The Peruvian government also promised the Achuar 5 percent of the money from an oil-funded regional development plan.

Argentina’s trade surplus fell 10.3 percent to $895 million in September compared with the same period a year ago as a surging economy sucks in more imports. The surplus in the first nine months of the year stood at $9.09 billion, 1.5 percent higher than in the comparable period in 2005. Imports rose 28 percent to $3.17 billion in September while exports rose 17 percent to $4.07 billion.

The Argentine government said it accumulated a fiscal surplus before debt payments of $709 million in September, 36.8 percent more than a year earlier as a surging economy provided higher than expected tax receipts. The Argentine economy is set to grow more than 8 percent this year. In the first nine months of the year the surplus before debt payments was $6.12 billion, 13.1 percent more than the same period in 2005.

Argentina’s economic growth continues to march onwards and upset analysts’ growth forecasts, with year-on-year expansion in August of 8.6%. In the same month last year, the economy had its strongest monthly growth, expanding 10.5% year on year. On a monthly basis, GDP expanded 1.1% from July. Growth for the eight months through August was 8.5%.

Bolivia and Argentina Thursday signed a new 20-year gas deal that will see Bolivia increasing the supply of its natural gas to its southern neighbor from current levels of 7.7 cubic meters a day up to 27 cubic meters a day by 2010. Bolivia’s government estimates the new deal will earn the country around $17 billion from sales to Argentina during this period. The importance of the deal for both countries was underlined by the attendance of both presidents, economy ministers and other high-ranking government officials at a signing ceremony in Santa Cruz, Bolivia. For Bolivia the contract is the first tangible evidence of a renegotiated energy deal since the government announced in May that it was nationalizing the hydrocarbons sector. For Argentina, heading towards an energy crunch, it is a guarantee of future supplies to power its thermoelectric generation plants.

Venezuela and Argentina will launch the first tranche of their so-called “Bono del Sur” in the first two weeks of November, according to Venezuela’s finance minister Nelson Merentes. The two countries will issue jointly $1 billion, in Venezuela to avoid any possible claims or embargoes by Argentina’s holdout creditors. The bond will be the first of its kind and will comprise government debt securities from both sovereigns: one of Argentina’s dollar-denominated Boden bonds (2012 or 2015) and a 15-year TIF (título de interés fijo) from Venezuela. Investors will pay a yield based on the combined country risk of both issuers, which, according to JP Morgan’s EMBI+ Tuesday stood at 293 basis points and 218 basis points for Argentina and Venezuela, respectively. According to Merentes, the two nations will issue a further $1 billion before the end of the year and follow up with tranches next year of up to $3 billion.

UK investment management fund Ashmore has appointed Pablo Ferrero country manager of its operations in Argentina. Ferrero, an Argentine national, was formerly chief executive of Transportadora Gas del Sur (TGS). Ashmore began operations in Argentina in 2002 and has specialized in the country’s energy sector. Ferrero, an industrial engineer, will head up the Buenos Aires office of Ashmore Energy International and will report to Mark Coombs in London.

Spanish-Argentine oil company Repsol YPF has sold a 9% stake to Spanish property and construction group Sacyr Vallehermoso for $3.6 billion. Sacyr becomes the company’s second-largest shareholder after financial entity La Caixa, which owns just over 14%. Repsol YPF welcomed Sacyr as a “long-term shareholder” and said it would be facilitating the representation of Sacyr Vallehermoso on its board of directors, “in accordance to the nature of its [Sacyr’s] shareholder stake and Repsol YPF’s Corporate Governance policy”.

Argentina’s central bank, BCRA, has been incorporated as a member of the country’s securities exchange, Merval, allowing it to act as a market-maker to trade public debt securities, free of charge. The Bank already intervenes in the Rofex futures exchange and the open electronic market (MAE) and will now be able to trade the Lebac and Nobac debt securities that it issues. The Bank aims to increase the depth of the secondary market by making the move. The BCRA is barred from trading in equity.