Cleary Gottlieb represented Argentine power company Pampa Energía S.A. in the financing of its acquisition of approximately 67 percent stake in Petrobras Argentina from Brazilian state-run oil company Petroleo Brasileiro S.A.
The $600 million bridge loan facility was signed on July 26, 2016, and the loans were partially disbursed to pay the acquisition purchase price on July 27, 2016. A second tranche of the bridge loan facility will be available for Pampa to pay consideration in connection with a mandatory cash tender offer for the remaining outstanding stock in Petrobras Argentina. Citibank and Deutsche Bank acted as the joint lead arrangers and bookrunners of the bridge loan. ICBC, Credit Agricole and Banco Galicia acted as mandated lead arranger. Banco Hipotecario acted as arranger.
A separate Cleary team assisted Petrobras Argentina with the issuance of $500 million 7.375 percent bonds due 2023, which was completed prior to the closing of the acquisition. Part of the proceeds of the bond offering were used to finance a cash tender offer for Petrobras Argentina’s $300 million 5.875 percent bonds due 2017, which had a guaranty from Petrobras.
Approximately 70 percent of the 2017 bonds were tendered by the early tender deadline and repurchased in the cash tender offer, and Petrobras Argentina exercised its right to redeem the remaining 2017 bonds and discharge its and Petrobras’ obligations under the outstanding bonds and the related guaranty. The refinancing of Petrobras Argentina’s outstanding bonds to eliminate the Petrobras guaranty was a key condition precedent to the successful consummation of the acquisition. The bond issuance priced on July 14, 2016, and closed on July 21, 2016. Citibank and Deutsche Bank were joint lead bookrunners in the offering.
Pampa is the largest integrated power company in Argentina, generating about 8 percent of the nation’s electricity. Petrobras Argentina is among the four largest producers of oil and gas in the South American country and has extensive downstream operations, including refining, petrochemicals and electricity generation.