Argentina's $69 Billion of Bond Bids Bodes Well for Corporatesby
Country sold $16.5 billion of bonds in first sale since 2001
Provinces, companies may sell up to $8 bln of bonds: Puente
When Finance Minister Alfonso Prat-Gay boasted that Argentina drummed up almost $70 billion of bids and could have doubled the size of this week’s landmark bond sale, he signaled the restraint stemmed in part from a desire to give other issuers from the country a chance to exploit the demand.
Argentina’s provinces, cities and companies are now looking to capitalize on that demand as President Mauricio Macri pulls the nation out of default and ends a decade-long dispute with creditors.
Here’s a list of the issuers most likely to borrow internationally after Argentina raised $16.5 billion in its first debt offering since 2001:
* Pampa Energia: The energy producer has board approval to sell $400 million of bonds mostly to finance the purchase of Petroleo Brasileiro SA’s assets in Argentina. The company may pay a yield premium of 0.5 percentage point over Argentina government debt, Puente analyst Juan Manuel Vazquez said by phone from Buenos Aires. He predicts provinces and companies will sell as much as $8 billion before year end.
* Nextel Communications Argentina SRL will look to sell as much as $300 million of bonds to develop its mobile network, according to a company official familiar with the plans who asked not to be identified because he wasn’t authorized to discuss the matter. The company was recently acquired by Grupo Clarin, the country’s largest media business.
* City of Buenos Aires: Mayor Horacio Rodriguez Larreta met with bond investors in New York this week, his press department said Tuesday. The city may able able to obtain borrowing costs that as are as much as 0.5 percentage point lower than the national government, according to Puente.
* Cordoba: The province has hired JPMorgan Chase & Co. to organize a bond sale of about $1 billion, according to two people familiar with the matter who asked not to be identified because they weren’t authorized to discuss the matter publicly. Cordoba’s Finance Ministry declined to comment.
* Mendoza: Home to Malbec vineyards, the province has hired Credit Suisse Group AG as the lead organizer for a dollar bond sale, according to two people familiar with the matter. Mendoza aims to sell as much as $500 million of debt, one person said. Mendoza’s Finance Ministry declined to comment.
*Entre Rios, Neuquen and Chubut: These provinces will also look to sell debt overseas, said Carlos Aszpis, an analyst at brokerage Schweber Securities SA.
“The impressive market demand reduces rollover risk and should increase off-index demand for the quasi-sovereigns,” Siobhan Morden, the head of Latin America fixed-income strategy at Nomura Holdings Inc., said in a note to clients.