Pecom Energia Tides Itself Over

Sep 1, 2001

With investors even more skittish, Argentine companies are relying on their relationship banks for financing. Pecom's unsecured note is carrying the company through a rough time in the markets.

In July, when Argentina's government couldn't find anyone to buy its bonds at a rate it could pay, Pecom Energía, the energy arm of holding company Pérez Companc, found bankers willing to lend it $220 million at an all-in cost of 9.3%. Moreover, they didn't require Pecom to secure the four-year floating rate note on its assets. It was the first unsecured oil monetization facility for an Argentine company. "The company has a long history as a premier oil producer and in this environment, it is something that the market considers a real asset," says Patricio Kelly, head of Deutsche Bank in Argentina, which led the deal. Luis Sas, director of finance at Pecom Energía says, "It was a fantastic deal for us both in terms of price and support, the kind you expect from your relationship banks."...

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