The International Finance Corporation (IFC) has signed a US$250mn loan for Pan American Energy, Argentine branch, a branch of Pan American Energy.
A joint venture company between BP plc and Bridas Corporation, Pan American is the second largest oil and gas producer in Argentina, accounting for about 13% of the country’s output.
The loan will finance part of the Argentine branch’s 2005 capital expenditure programme, which is primarily focused on its operations in the Golfo San Jorge basin in southern Argentina.
IFC’s US$250mn loan package comprises a US$115mn loan for IFC’s own account and a US$135mn loan for the account of commercial banks. Commercial bank participation was closed with an oversubscription. ABN Amro, Calyon (New York), HSBC Bank and Standard Bank joined the B-loan as lead arrangers.
Syndication closed with an oversubscription through the participation of Dexia Credit Local, HVB Group, Caixa Geral de Depositos and Natexis Banques Populaires.
The seven-year tenor of the IFC syndicated loan is the longest tenor raised for an Argentine borrower since the country’s economic crisis in 2001.
Rashad Kaldany, IFC’s director for oil, gas, mining, and chemicals, says: “IFC’s financing will support a company that is recognised as a good corporate citizen. Pan American Energy has a strong development impact in the regions in which it operates, through high levels of employment, contributions to fiscal revenues, and development of local industries and small and medium enterprises. In addition, its substantial gas production and strategically located gas reserves provide a clean source of fuel and help alleviate the current supply shortage in Argentina.”
Atul Mehta, IFC’s Director for Latin America and the Caribbean, notes: “IFC is pleased to continue supporting Argentina’s successful export-oriented companies, which have played an important role in the recovery of the country’s economy.
“This operation complements IFC’s regional strategy to act as a catalyst for investment in Argentina by helping to mobilise long-term financing from the international commercial markets.”