Transfer of Risk Saves Pecom

Jul 1, 2003

In 2001, Argentine companies had almost no access to capital. The country was heading for default and banks began slashing corporate credit lines. Corporates also had little access to affordable political risk insurance. But Deutsche Bank managed to pull together a $220 million syndicated deal for Argentine oil company Pecom Energía, majority owned by Pérez Companc, which mitigated the enormous political and economic risks facing Argentine companies.

Bankers at Deutsche realized that while the market accepted the performance risk of Pecom, it was concerned about the convertibility and transferability risk facing the company. The structure of the deal minimized Argentine sovereign risk in a...

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