Pampa Energia gives results in exchange offer for 7 3/8% notes; over 81% tendered

By Mary-Katherine Stinson

Lexington, Ky., Aug. 1 – Argentina’s Pampa Energia SA announced the final expiration and results of its exchange offer for any and all of the outstanding $500 million 7 3/8% senior notes due July 21, 2023 (Cusips: 71647XAA5, P7873PAE6) issued by Petrobras Argentina SA, according to a press release Monday.

As of the July 29 expiration of the offer, total participation in the exchange offer was $407,093,000 in aggregate principal amount of old notes, representing 81.4% of the old notes outstanding. This is sufficient to satisfy the minimum participation condition requiring at least $350 million notes to be tendered.

Noteholders could either choose option A or option B when tendering their notes, as previously reported.

Specifically, $193,802,000 total principal amount of old notes, or 38.8%, have been tendered in the exchange offer under option A and $213,291,000 total principal amount of old notes, or 42.7%, have been tendered in the exchange offer under option B.

At settlement Pampa expects to issue $292,796,835 aggregate principal amount of new notes and to pay $122,127,894.75 cash consideration as total consideration for the old notes tendered in the offer.

History of the offer

To recap, the company started the offer on June 16 and subsequently announced on July 7 that it was extending the early participation deadline through the end of the offer. The early participation deadline continued to run through the end of the offer, which was 11:59 p.m. ET on July 29, pushed out from 11:59 p.m. ET on July 20.

Further, as reported on July 18, the company announced an increase in the coupon of the new notes due 2026 issued in the exchange to 9˝% from 9%.

As of the original early participation deadline at 5 p.m. ET on July 6, the company had received tenders for $102,337,000 of the notes, or 20.47% of the principal amount of notes outstanding under option A and approximately $198,661,000, or 60% of the notes, in tenders under option B.

Option A

Under option A, eligible holders will receive approximately $377.20 in new notes and $630.20 in cash for each $1,000 principal amount of old notes validly tendered and accepted for exchange.

As a recap, noteholders tendering under option A on or prior to the extended early participation deadline were set to receive a combination of the early A pro-rata cash consideration in an amount equivalent to the lesser of (1) 30% of the aggregate principal amount of old notes validly tendered and accepted for exchange in the entire offer and the principal amount of old notes accepted and (2) the principal amount of old notes accepted for exchange under option A.

The amount of new notes issued, per $1,000 principal amount tendered under option A, is the difference between $1,020 and the pro-rata cash consideration. This was changed from the difference between $1,000 and the pro-rata cash consideration.

Option B

Noteholders tendering under option B on or prior to the early participation will receive $1,030 principal amount of new notes per $1,000 principal amount validly tendered and accepted for exchange. This amount was increased from $1,010 principal amount of new notes per $1,000 principal amount.

Offer details

In all cases, accrued interest will also be paid.

The withdrawal date was the same as the original early participation date and has passed.

Settlement is expected to be on or about Aug. 8, in compliance with the approval received from the Argentine Central Bank to access the foreign exchange market starting on Aug. 1 for obtaining the U.S. dollars required for the total cash consideration.

D.F. King & Co. Inc. (877 732-3617; 212 269-5550; pampa@dfking.com) is the information and exchange agent for the exchange.

Citigroup Global Markets Inc. and Santander Investment Securities are the joint global coordinators and lead dealer managers for the exchange offer. BNP Paribas Securities Corp., HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC are joint dealer managers. Banco de Galicia y Buenos Aires SAU, Industrial and Commercial Bank of China (Argentina) SAU and Banco Santander Argentina SA are acting as local placement agents.

Pampa Energia is an energy company based in Buenos Aires.

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