Pricing for YPF Loan Emerges (1)

An Argentine private equity group led by the Eskenazi family is offering what some see as attractive pricing on a $2bn 3.5-year loan to support the acquisition of 25% of YPF, the Argentine subsidiary of Spain’s Repsol YPF. At a well attended bank meeting last week in Madrid, the group told bank participants they could expect to receive 200bp over Argentina’s 3-year CDS, according to a banker who attended. On Monday, the basis was quoted at 380bp-395bp over Libor. An up-front fee of 125bp is also included. Repsol assured prospective participants it would remain closely involved with YPF, and that its engineers and oil and gas experts would remain in control of the technical aspects of the company. The new investors, who today operate among other things a bank, would be involved in the financial and administrative management of the assets. The loan is also heard to be secured by shares and some of the assets themselves, providing needed comfort to banks venturing into Argentina. A $2bn seller’s note is also part of the total $4bn financing package. Credit Suisse is the global coordinator, with BNP Paribas and Morgan Stanley as bookrunners.