Equity Group Secures $2.2bn for YPF Stake

The Peterson Group, led by Argentina’s Eskenazi family, has managed to secure the necessary funds to acquire a 14.9% stake in YPF. The deal sets a new benchmark for LatAm M&A financing and shows how a relatively unknown investor can secure a large sum of cash for a deal with numerous risks. The group obtained a firm commitment from Credit Suisse, BNP Paribas, Goldman Sachs and Itau for a $1.02bn bridge loan, which is expected to fund in early February, say executives close to the deal. The group, led by Credit Suisse, abandoned an original plan to syndicate the loan and opted for a straight bridge. It will try to syndicate the facility in the coming weeks. The 3-year average life loan pays the equivalent of Argentine 3-year CDS over Libor, plus 200bp. The Petersen Group also received a $1.02bn seller’s note from Repsol, YPF’s parent. The two pieces combined add up to $2.04bn. That is short of the $2.24bn needed for the 14.9% stake, suggesting the Peterson Group will put in roughly $200m in equity. The group has the option to buy an additional 10.1% at a later date. The challenge for leads will now be to sell down their holdings. A number of prospective lenders are heard to have backed away from the transaction when it was pitched in Madrid late last year because of the risky zip code and a generalized aversion to more challenging credits. YPF is also gearing up for an IPO later this year of at least 20% of the shares held by Repsol, which means the deal could top $3.00bn. Credit Suisse and Goldman will be among the banks taking a lead role on that offering.