Edesa Puts Bond to Bed

Argentina’s Empresa Distribuidora de Electricidad de Salta (Edesa) has finally priced a $63m 2017 bond, after postponing issuance plans in February. The Argentine utility priced the RegS-only bond at 95.125, with a 12.75% coupon, to yield 14.25%. “When you look at Edenor trading at around 19%, EDESA at 14.25% does not look that bad. The juicy yield was necessary to compensate investors for the country, industry, use of proceeds, small illiquid issue size, new ownership, the tight or inexistent free cash flow, and the FX mismatch between USD debt and Argentine cash flow,” says a fixed-income investor. The B2/B rated electricity distribution company from the Salta province raised funds to repay existing debt. Deutsche Bank was sole lead on the transaction. Itau and Standard were mandated on an original deal, which was postponed when the CEO of Edesa’s controlling shareholder Edenor resigned.