Neuquén Province to pitch first US bond since 2017

Argentina’s Neuquén Province will pitch foreign investors in New York on its first new international bond in nearly a decade as the local government reaps the rewards of a shale oil boom, according to two people with direct knowledge of the matter. 

Provincial officials are heading to Wall Street for an investor roadshow starting July 20. They’re seeking to secure a bullet bond with interest rates ranging between seven percent and eight percent and a five- to seven-year maturity, according to the people, who asked not to be named before the trip begins. Neuquén’s legislature has already approved the issuance of up to US$500 million in new bonds, which would be the province’s first since 2017.

As President Javier Milei avoids returning the national government to global markets for now, Argentina's provinces are taking advantage of investor optimism about his economic overhaul to issue new bonds abroad. If Neuquén goes ahead with the issuance, it would join Córdoba, Chubut, and Buenos Aires City, among others, that have sold abroad in recent months as bond spreads have narrowed. 

Oil and gas companies that operate in Neuquén, such as Pampa Energía SA and Pluspetrol SA, have also tapped global markets to seize on optimism around Argentina’s energy outlook. 

The province is home to a shale oil and gas boom in an outpost of Patagonia that’s taken on new significance as companies pour billions of dollars, ramping up production that’s on track to reach one million barrels a day of oil by the end of the decade. 

An added incentive arrived recently when Milei’s government amended its investment programme known as RIGI to allow shale drilling projects to qualify for tax breaks and legal protections. That change has lured big-ticket projects from producers including Chevron Corp.