Pan American Energy (PAE), the second-biggest oil producer in Argentina, aims to raise up to $500 million this week in its first bond issue in the international market for three years.
PAE, a joint venture between London-based BP and Argentina’s Bridas, began to offer eight-year, US dollar-denominated bonds at an auction that runs from Monday through Thursday. The company will start the sale at $300 million and increase it based on demand, according to a securities filing.
The New York-law bonds pay a fixed rate of interest that will be determined in the bidding process, according to the filing.
PAE said it will use the proceeds to finance investments, including in drilling and completing wells, fracking in the Vaca Muerta shale deposit and expanding oil refinery capacity. The proceeds may also be used for acquisitions, refinancing debts and working capital, it added.
The company printed $300 million worth of six-year bonds in the cross-border market in April 2021 to fund a buyback. Since then, the company has relied on the local market for its funding needs, most recently recently maxing out the sale of $30 million worth of dollar-denominated two-year bonds yielding 5.7%.
Galicia and Santander are the bookrunners on the latest deal.
Fitch Ratings and Moody’s rate the notes BB- and Caa1 respectively, the said Monday in separate reports on Monday.