Category: Argentina

Argentina’s government has agreed to authorize a $250 million bond issue planned by the western province of Neuquén, according to the province’s governor, Jorge Sobisch. The securities will be regulated by provincial law and backed by Neuquén’s oil reserves. The bonds will fund much-needed infrastructure projects in the province, such as the Mari Menuco Canal to provide irrigation for up to 30,000 hectares of land, the Tren Transandino del Sur to the border with Chile, a ring-road and several hospitals.

Argentine electrodomestic appliances retailer Electrónica Megatone, the country’s largest, has issued a further $19 million of financial securitizations, taking the nominal value of certificates issued by the company to date to $485 million. The company’s paper is rated AAA by Fitch Ratings Argentina. Banco de Valores and Compañía Inversora Bursátil arranged the deal and acted as placement agents. Deloitte & Touche Corporate Finance acted as financial advisor and controller. The issuance of local currency financial securitizations in Argentina has shot up this year, with offerings for the year, as at end-August totaling $1.36 billion, or around 85% of the total issued last year. Consumer credit remains the dominant underlying asset, accounting for 80% of all securitizations but growth is expected to come from leasing contracts, car loans, future cash flows from accounts receivables and infrastructure loans.

Atlantic LNG Company of Trinidad and Tobago has named its new chief executive, Argentine Oscar Prieto, who took up the reins on September 1 after moving from BG Egypt, where he was president. Prieto replaces former CEO Rick Cape who has moved to BP America as a vice-president. Atlantic LNG is a consortium of BP, BG, Repsol YPF, Suez and National Gas Company of Trinidad and Tobago.

Argentine gas distributor Transportadora Gas del Norte (TGN) has closed its $664 million debt swap program, with uptake of 99.94%, according to the company. TGN said that participating creditors included the International Finance Corporation (IFC), ING Group and hedge funds D.E. Shaw and Stark Investments. The company offered a combination of bonds, stocks and cash payments ($52.4 million), with the new stock representing 20% of the company, and the bonds (two series) maturing in 2012 carrying annual interest rates of 6% and 7%. TGN’s shareholders include Argentine industrial conglomerate Techint, Total of France and CMS Energy Corporation.

Argentina is aiming to sell up to $500 million of its dollar-denominated Bonar bond (series VII), due in 2013, today – Thursday. The sovereign decided to take advantage of Argentina’s record low country risk at the moment to open its financing for next year. The bonds, which are due to be sold via Dutch auction will be offered at an annual fixed interest rate of 7%. Argentina last sold dollar-denominated debt at the end of July, when it achieved a yield of 8.34% for $500 million of its Bonar bonds.

Three Argentine power companies are to issue debt securities totaling $75.5 million. Empresa Distribuidora de Electricidad de Salta (Edesa); Empresa Distribuidora San Luis (Edesal); and Empresa Distribuidora de Electricidad de La Rioja (Edelar) are set to issue $48.5 million, $18 million and $9 million respectively of four-year, senior guaranteed notes, with an annual coupon of 10.75%, to refinance debt. The notes will be guaranteed by their parent company, Empresa Distribuidora Eléctrica Regional (Emdersa). JP Morgan is leading the deal.

Argentina has delayed the sale of the postal service yet again, this time until July 31 next year. The reprivatization of the postal service has been delayed four times since the government took “temporary” control of the Correo Oficial de la Republica Argentina in November 2004. The extensions were granted to allow more time for its operations to be consolidated, according to the government.

Argentina has announced that it is to kickstart its nuclear program in a drive to avert its much-heralded energy crisis. Planning Minister Julio de Vido said the government planned to extend the life of its two existing nuclear power plants, which date back to the 1970s, and complete stalled construction of a third plant by 2010. The country may also resume uranium mining as part of the same strategic plan. Rising energy demands and continuing economic growth have led to warnings of an energy crunch in Argentina. This, combined with the higher costs of traditional fuels, have likely prompted the government to review its nuclear program.

Argentina’s trade surplus narrowed to $940 million last month, down 25% on the surplus for July last year. However, overall, the surplus for the first seven months of the year was up 1.7% year on year. The reduction in the surplus was due to the sharp rise in imports in July, up 21% to $2.9 billion, against a slight rise (6%) in the value of exports to $3.8 billion. So far this year, exports have risen 12% to 25.3 billion and imports are up 16% to $18.5 billion, taking the trade surplus to $6.8 billion. Argentina’s largest trade partner continues to be Mercosur, followed by the EU.