The province of Neuquén made its return to the international credit markets this Thursday after nearly ten years and successfully placed a bond for USD 500 million maturing in 2034, at an annual rate of 7.35%, lower than the nearly 8% yield that analysts estimated before the operation.
The placement marks the first international issuance carried out during the administration of Governor Rolando Figueroa and represents one of the most significant provincial financing operations of the year. The result reflected the strong interest of investors in Argentine assets linked to the energy development, especially due to the potential of Vaca Muerta.
Growth and stability prospects increase alongside the development of Vaca Muerta
The province had recently conducted a series of presentations to local and international investors to showcase the evolution of its public accounts and the prospects of the hydrocarbon sector. According to the Neuquén government, the offers received greatly exceeded the amount sought and the demand doubled the USD 500 million finally awarded, which allowed for a reduction in the financing cost from initial forecasts.
The performance also stands out compared to other recent provincial issuances. While Entre Ríos returned to the market with a bond that paid an annual rate of 9.875%, Neuquén achieved considerably more favorable conditions, supported by the balance of its fiscal accounts and the expectations of expanding oil and gas production.
The issued bond will mature in 2034 and includes the amortization of the principal in three installments during 2032, 2033, and 2034. Additionally, it includes the possibility of early repurchase from 2031 and, unlike issuances made years ago, does not use hydrocarbon royalties as a payment guarantee.
The placement was made possible thanks to confidence in the development of Vaca Muerta
The provincial administration indicated that the total funds obtained will be allocated to finance infrastructure works. Among the planned projects are investments in roads, connectivity, public services, energy, health, and education, aiming to support the population and productive growth that the province is experiencing due to the development of Vaca Muerta.
The operation consolidates the return of Argentine provinces to the international credit market. In recent months, Córdoba, Santa Fe, the City of Buenos Aires, Entre Ríos, and Chubut have also made issuances.
