Telecom Argentina returns to international markets with US$500mn bond issue

Telecom Argentina issued bonds for US$500mn, up from the initial expectation of US$300mn due to demand and marking its return to international markets.

The telco’s last international bond issue was four years ago.

According to a statement, the bonds will yield 9.7%, have a coupon of 9.5%, and a maturity of seven years with partial amortizations in years five, six and seven.

The issuance is part of a global program for up to US$3bn, approved by securities regulator CNV.

The response by investors to the bond issue, with the initial amount being 2.6 times oversubscribed, "is the result of the confidence of both the national and international market in the financial strength of the company and in its business strategy," Telecom said in the release.

At the same time, the operator made an offer that expires August 5 to redeem up to US$100mn of its class 5 notes due 2025. It also launched on Thursday an exchange offer for up to US$200mn of its class 1 notes due 2026, which is due to expire August 8.

At the beginning of this month, Fitch said the outlook for Telecom Argentina’s ratings are stable, valuing the company's solid financial and operational profile and ability to continue mitigating inflationary pressures.

“Telecom Argentina's financial structure is among the strongest Fitch-rated telecommunications companies in the region, and is characterized by a conservative capital structure and positive cash flow,” the agency said.

The global coordinators of the issue were Deutsche Bank Securities, JP Morgan and Santander, accompanied by BBVA NY, BCP Securities, Latin Securities and UBS Investment Bank as bookrunners. The local brokers were Latin Securities, Banco Galicia, Macro Securities and Industrial and Commercial Bank of China.