Argentine utilities Empresa to issue $75.5 million of guaranteed bonds via modified reverse auction

By Reshmi Basu

New York, Aug. 29 - Three Argentinean utility companies are planning to issue a combined total of $75.5 million in 10¾% senior guaranteed notes via a modified reverse auction.

Empresa Distribuidora de Electricidad de Salta (Edesa) will issue $48.5 million of new notes. Empresa Distribuidora San Luis SA (Edesal) will sell $18 million while Empresa Distribuidora de Electricidad de La Rioja SA (Emdelar) will issue $9 million.

Parent company Empresa Distribuidora Electrica Regional SA (Emdersa) will guarantee the notes, which are set to mature on Dec. 9, 2010.

The price of each set of bonds will be determined by separate auctions. The minimum price has been set at 100 and the maximum price at 104.

The auctions will expire at 2 p.m. ET Sept. 7.

Meanwhile the notes will start amortizing in 2007. The companies will pay back 10% on Dec. 9, 2007, followed by another 10% on Dec. 9, 2008 and 20% on Dec. 9, 2009. The remaining 60% will be paid at maturity.

The notes also will also be callable. On Dec. 9, 2006, the notes will be callable at 103. On Dec. 9, 2008, the notes will be callable at 101½ and Dec. 9 2009 at 100.

Proceeds will be used for debt refinancing.

JP Morgan is the lead manager for the deal.

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