EM LATAM CREDIT: Argentina's Pluspetrol Expected New Issue to Fund Vaca Muerta
Pluspetrol (B3 / NR / BB)
“Pluspetrol Taps Global Debt Markets After Exxon Shale Purchase” – BBG
IPTs 7Y: N/A
FV 7Y: 8% Area
• Argentina privately held oil and gas exploration company Pluspetrol is expected to issue USD benchmark size senior unsecured 7-year notes to refinance loans taken to fund the acquisition of Exxon Vaca Muerta assets December 2024.
• Comps would include larger and higher rated Argentina oil and gas exploration and production company Pan American Energy (PANAME;B3 /NR /BB-) that has a 7 year final, 6 year average life bond last quoted 7.12% as well as Argentina oil and gas exploration and production company Vista Energy (VISTAA; Caa1 /NR /BB-) with 9.5-year bond yielding 8.09%.
• Argentina electric generation and oil and gas exploration company Pampa Energia (PAMPAR; Caa1 /B- /B-) just tapped its 2034 notes at 8%.
• Argentina government-controlled energy company YPF (YPFDAR; Caa1 /B- /CCC) has 8.75% 2031s at T+414bps or 8.23%. We can also observe TECOAR 2031 notes were last quoted at 8.35%.
• Pluspetrol currently has a smaller production profile than Pan American Energy or Vista but has an ambitious growth plan to take production from 50,000 boe/d to 140,000 boe/d over the next four years according to Moody’s and a capex plan of USD4.6bn over that same period according to Fitch.
• Fitch adds a notch to the rating for the support coming from the holding company Pluspetrol Resources Group of a USD500mn subordinated credit line that the company will have access to for the life of this international market transaction.
• Given the negative free cash flow expected over the next few years, keeping the company reliant on external financing as well as the already high leverage and currently smaller production profile, we put this risk on top of or wide to Vista Energy bonds.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
