Corporate High-Yield Bond of the Year: YPF
Argentina’s deep economic slowdown and currency crisis closed the door to the international credit markets for most Argentine issuers for months during 2018 and 2019.
State-run energy company YPF ended a 14-month drought for borrowers when it sold cross-border bonds in June, raising $500 million in 10-year, dollar-denominated notes. The company carried out a well-timed deal, capitalizing on a rally in Argentine assets as investors reacted positively to the announcement of President Mauricio Macri’s running mate. (Macri would go on to lose the election.)
Growing expectations that the US Federal Reserve would cut interest rates also gave momentum to YPF’s efforts, and helped alleviate pressure on emerging market currencies, including the Argentine peso.
In YPF’s first cross-border deal since 2017, the company priced the bond to yield 8.75% after opening between 9% and 9.3%. That compared to a yield of 7.12% when it sold $750 million in 30-year notes in December 2017. At that time, it also added $250 million to its 6.95% 2027 notes at a yield of 6.08%.
Bookrunners on the 2019 deal included Citigroup, HSBC and Itaú Unibanco.
YPF’s bond sale came on the same day that the US Supreme Court allowed Petersen Energia Inversora to press ahead with a lawsuit seeking compensation for the shares it owned in YPF when the Argentine government renationalized the company in 2012.
Award accepted by: Diego Celaa, Finance Manager
Corporate High-Yield Bond of the Year
Date: June 2019
Size: US$ 500 million
Supporting Financial Institutions: Citi; HSBC; Itaú BBA
Supporting Law Firms: Milbank; Estudio O’Farrell; Linklaters; Tanoira Cassagne Abogados
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