Here's another con nicely supported by your US tax dollars
OPIC
DJ Argentina's TGS To Sell $150M In OPIC Guaranteed Bonds
28 Feb 08:16
(This article was originally published Tuesday)
BUENOS AIRES (Dow Jones)--Transportadora de Gas del Sur SA (TGS), Argentina's
leading natural gas processor and transporter, plans to sell $150 million in
bonds backed by highly-coveted political risk guarantees from the U.S. Overseas
Private Investment Corp., a TGS official said Tuesday.
U.S. banks Wachovia (WB), Bank of America (BAC) and BankBoston are managing
the sale, which will be marketed mainly to U.S. investors. TGS will meet with
bankers on Wednesday in New York and in Buenos Aires to discuss the deal, the
official said.
He added that the OPIC-guarantee essentially puts TGS on par with a mid-cap
energy company in the U.S. selling debt.
TGS is no stranger to innovative financing. More than a year ago, the company
sold $300 million of 12-year notes in a private placement that was organized by
the Inter-American Development Bank. The securities were purchased by mainly
U.S. insurance companies.
The company is 70%-owned by Compania de Inversiones de Energia SA (CIESA),
which is owned by Texas-based Enron Inc. (ENE) and Argentina's Perez Companc SA
(PC). TGS operates 7,089 kilometers of gas distribution pipeline and transports
on average 58 million cubic meters of natural gas per day.
OPIC, a U.S. government agency that promotes and insures U.S. business
activities overseas, provides guarantees against loss to units of U.S.
companies operating in emerging markets.
Its backing of the financial assets issued by those emerging market companies
increases their value because investors are protected from possible currency
devaluations or other developments that might hurt the value of those assets.
Last year, OPIC backed a $175-million bond issue in the U.S. by Argentina's
Transportadora de Gas del Norte (TGN). Two of the company's principal
shareholders are CMS Energy Corp. of Dearborn, Michigan and TotalFina Elf of
France.
A TGS finance official said the OPIC guarantee will help the company raise
cash at a time when many Argentine companies are facing high borrowing costs.
Argentina's interest rates have risen on concerns the South American nation
may not be able to trim its 2001 federal budget deficit to $6.5 billion, a
target suggested by the International Monetary Fund in exchange for $40 billion
in emergency financial assistance.
Investors are also concerned that Argentina's failure to revive its sluggish
economy, which is almost three years into recession, could mean the government
won't have the cash to repay its debts.
"When there is an appetite for emerging market debt, the risk guarantee is
not that helpful. However, in times of market turbulence, is adds value to
paper," the official said.
-By Tom Darin Liskey, Dow Jones Newswires; 5411-4314-2757;
tom.liskey@dowjones.com
(END) DOW JONES NEWS 02-28-01
08:16 AM
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