EM LATAM CREDIT: Argentina's Pampa Energia Reopening 2034 Notes, FV Opinion

Pampar Energia (PAMPAR; Caa1 /B- /B-)

“*NEW DEAL: PAMPA ENERGIA SA $TBD REOPEN 7.875% DEC '34S, 8.25%A” – BBG

IPTs 2034 Tap: 8.25% Area
FV 2034 Tap:   8% Area

• Argentina energy company Pampa Energia mandated investor meetings with a potential tap of the existing senior unsecured 7.875% 2034 notes callable in 2029 and rated ‘B’ by Fitch. Proceeds will be used to redeem some or all the USD292.525mn 2029 notes.

• The PAMPAR 2034 notes were last quoted T+321bps or 7.69%, 33 bps tighter QTD and 18bps tighter YTD. Compared to government-controlled energy company YPF (YPFDAR; Caa1 /B- /CCC) 2034s, last quoted 8.5% or 81 bps apart but the average is closer to 60 bps so applying that spread to the existing PAMPAR 2034 notes would give you a yield of 7.9% or T+342bps.

• The company owns 25.5% of gas pipeline Transportadora de Gas del Sur (TRAGAS; Caa1 /B- /B-) which contributed about 20% to EBITDA in the first quarter 2025. TRAGAS 2031 notes were last quoted T+301bps, or 7.07%.

• Higher rated Argentina oil and gas company Vista Energy (VISTAA; Caa1 /NR /BB-) has 2035 bonds (9.5 year average life) last quoted T+361bps.

• The majority of Pampa Energia’s EBITDA comes from regulated businesses in electricity generation and gas pipelines while the balance is derived from oil and gas exploration.

• The regulated businesses are tied to the fortunes of the sovereign as they are domestic businesses. The generation segment relies on payments from the government intermediary agency CAMMESA (Argentine Wholesale Electricity Market Clearing Company).

• In 1Q 2025, 60% of EBITDA came from generation, about 20% from investments in other businesses including TGS and 20% of EBITDA derived from oil and gas exploration.

• The Argentina sovereign bonds (ARGENT; Caa1 pos /CCC /CCC+) were last quoted USD67.12, unchanged today.