Telecom resumes capital market fundraising

A year after suspending the search for funds abroad to finance projects in the country, Telecom Argentina is again trying to raise funds in international markets.

The telecommunications operator has just announced that it is resuming its plan for issuing marketable bonds (ON) for a maximum amount of 500 million US dollars, which it had canceled three times in 2018.

These are documents that are part of a larger program of up to US $ 3 million whose initial investments were agreed on May 3, 8 and 21, 2018, then postponed to June 14 and again for the 28th of the same month.

After that date, the company no longer attempted to place these securities on the capital market, taking into account the situation of instability in local and international markets and the fact that borrowing conditions were not met. because the rates they offered were not favorable.

In fact, at the time, company sources had admitted that international volatility, particularly financial uncertainty and exchange rate uncertainties, made payment rates too high for the company's debts.

The NOs that were to be issued included terms of five years, seven years and up to ten years, but with the date of their impending publication, Telecom rejected them again on August 3rd of last year.

However, that day, the operation was suspended again. But instead of signaling a new date, the company preferred to send a statement to the National Securities Commission (NVC), announcing that the program was frozen until further notice.

"It was reported that the company had decided to temporarily suspend, until further notice, the NO investment period, in order to inform the investing public that the company would issue a supplementary notice to the Prospectus Supplement. , announcing the date in which the period of the offer and the date of allocation will be resumed, "said the statement a year ago.

The company will now launch the ON Series with a face value of $ 300 million, which may be extended to $ 500 million and the proceeds of which will be used to refinance the debt already incurred by the company held by the Fintech Fund. Mexican businessman. David Martinez

The decision was made after considering that the current capital market conditions were much more favorable both in the country and abroad, which means that there is a good chance 39 to obtain money to pay the purchase price of clbad A NO with its already issued interest and expenses and to restate other long-term liabilities to which the company is exposed and which were used to support his expansion projects in Argentina.

In the prospectus published by Telecom Argentina on the Buenos Aires Stock Exchange, it is explained that in the country, the investment bank will be ICBC. In the case of external markets, the responsibility will rest with Citigroup Global Market; HCBC Securities; JP Morgan Securities and Santander Incvestment Securities.

The offer period by the network operators ends this Thursday at noon, when local and international underwriters will be able to receive the investor interest events.

In the case of the total amount of the issue, this will be defined by Telecom Argentina at the end of the procedure of placement and allocation of NO. The same thing will happen with the return of the issue while the minimum subscription amount has been set at 150,000 USD.

With respect to the investment and allotment methods, the prospectus specifies that they will be carried out according to the process known as open book or book construction that will be in charge of international investment banks.

In this sense, potential investors must present the expressions of interest by indicating the amount of the subscription and the applicable yield applied for expressed at an annual nominal rate rounded to three decimal places.

The NOs will have a maturity date of seven or ten years from their issuance, while the principal will be paid in one installment on the expiry date.

In addition, they will bear interest at the fixed rate to be determined by the Company after completion of the NO allocation and allocation process detailed in the prospectus supplement distribution plan. In addition, these interests will be paid twice a year.

Last year, when the company chose to no longer issue these securities due to instability and volatility of the local economy, other companies also followed the same path.

One of the cases was that of Ganadera La Paz, which operates in the province of Mendoza and is composed of national capitals. Its main shareholder is the Cooperativa de Seguros Triunfo Limitada. The owners held a special meeting of the Series 1 Noteholders to review the change in the expiry date of these securities, extending it until June 23rd.

The same thing happened with the Distribuidora de Gas del Centro, which in March 2018 postponed the public offering of shares on the local stock exchange for a maximum amount of 210 million dollars, also due to the "volatility of markets. "

Bioceres was also on the list, which had postponed its takeover bid to the Buenos Aires Stock Exchange and New York until further notice, while other companies had to lower their placement prices. initial to not fail, as in the case of Central Puerto and Airport Corporation America.

That year, the last loan of an Argentine company abroad dates back to April: Transportadora de Gas del Sur (TGS) obtained 500 million US dollars from Wall Street with a bond maturing in 2025, to a rate of 6.75 percent.

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