Spain’s Repsol Cuts Argentine Ties in Final Bond and Stock Sales

Repsol SA, Spain’s largest energy company, ended its ties with Argentina by selling its final stake in YPF SA and the last of the country’s bonds it held.

The two sales announced today were for a 0.48 percent stake in YPF and $117.4 million in the Latin American nation’s government bonds due in 2015, Madrid-based Repsol said in an e-mailed statement. The sales take the total amount received for YPF to $6.3 billion after the 2012 nationalization of the Argentine oil producer, according to the statement.

The $6.3 billion adds to Repsol’s existing cash pile of $7.1 billion, which Chairman Antonio Brufau wants to use to acquire companies with growth potential in developed countries. The funds from YPF comprise the $5 billion in bonds it received earlier this month in bonds as compensation from the Argentine government for the seizure of YPF, and $1.3 billion from shares that Repsol held onto until the payments were settled.

Moody’s Investors Service on May 20 raised Repsol’s rating to Baa2, the second-lowest investment grade, after the previous bond sales to JPMorgan Chase & Co. The disposals “significantly enhance the group’s financial flexibility,” Moody’s analyst Francois Lauras wrote in a note.

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