Albanesi shows high yield in latest Argentine deal
By Paul Kilby
NEW YORK, July 20 (IFR) - Argentina's Albanesi had the market to itself on Wednesday as it moved forward with a US$250m seven-year non-call four bond - the latest in a long list of offerings from the country.
The electricity group launched the trade (rated B3/B+) at 9.875% earlier in the day, offering the highest yield from an Argentina issuer so far this year.
The only exception is pulp company Celulosa Argentina, which tried but failed to sell a seven-year bond at 10% area earlier this month.
Uncertainty over the regulatory environment in Argentina, a recent deluge of supply out of the country, and the deal's relatively small size requires this kind of pricing, said investors.
"This is an off-the-run, complex deal but the pricing in the high 9% range appears to compensate investors for that," Jason Trujillo, an analyst at Invesco, told IFR.
The deal, which is guaranteed by Albanesi SA, is structured so that three subsidiaries are joint obligors.
Proceeds are going partly to repay about US$120m of secured debt at two of those subsidiaries - Generacion Mediterranea and Central Termica Roca - while the remainder will largely go to expand capacity.
Some accounts however have simply been unwilling to bet on the company's expansion plans at a time of continued doubts about the outlook for the country's electricity sector. Continuación...