TGN Workout Gets CCC

Fitch has assigned Transportadora Gas del Norte’s $247.3m exchange offer a CCC rating, it says. In the exchange, $247.3m in new 7-year notes are being offered to existing holders as part of its plan to restructure $347.3m in debt. It is offering investors new 2016 bonds paying 6.50% rising to 8.50% over the life of the notes, or a cash payout of 40 cents on the dollar for up to $40m. TGN’s total debt would be lowered by $100m through the offer, Fitch says, with short-term debt service significantly lowered for the first four years. “However, as principal amortizations begin in year five, absent tariff increases or other factors that add to positive cash flow, which remain highly uncertain at this time, cash flow would likely become negative and could result in pressure on credit quality and add to financial distress,” the agency says. TGN announced 87% acceptance in mid-October. Argentine gas regulators intervened in the management of TGN following a December 2008 default. Barclays is advising TGN.