YPF Plans to Sell $1 Billion of Bonds in Global Markets

YPF SA, Argentina’s largest company, is planning to sell $1 billion of 10-year bonds in its biggest-ever debt sale.

The state-controlled oil producer said in a regulatory filing it will sell the 2024 securities at auction on April 4. YPF last tapped international markets in December, when it sold $500 million of bonds after receiving orders for $2 billion.

YPF Chief Financial Officer Daniel Gonzalez said in a March 10 earnings conference call he would monitor the international bond market for a window of opportunity to borrow abroad. YPF is raising cash for its 2014 $5.5 billion investment plan, he said then. Gonzalez is currently in New York, according to company spokeswoman Doris Capurro.

The company should find it easy to sell the bonds, said Michael Roche, an emerging-market strategist at broker-dealer Seaport Global Holdings LLC.

“They did very well in their last sale,” Roche said in a telephone interview from New York. “The deal should price in the high 8 percent area” based on current yields on the company’s 2018 bonds.

The 2018 bonds yield 8.11 percent, about 3.7 percentage points less than Argentine government notes due in 2017.

The bond will be issued under Argentine law and will be offered to institutional investors in the U.S. through initial buyers Itau BBA USA Securities Inc., Morgan Stanley & Co. and HSBC Securities Inc., according to the filing.

YPF reported total debt of $4.9 billion at the end of last year, of which 41 percent was denominated in pesos.

Fitch Ratings Ltd said today it expects to assign a rating of B-/RR4 to the notes.

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Robin Saponar

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