Telecom Argentina Debt Sale Defies Telefonica Deal Scrutiny

(Bloomberg) -- Telecom Argentina SA is tapping international debt markets following its acquisition of Telefonica SA’s local unit, a transaction that has stoked fierce opposition from President Javier Milei’s government.

The company is selling $800 million of bonds due in 2033, according to people familiar with the matter. Pricing guidance suggests that the notes will carry a yield of around 9.5%, the people added, asking not to be identified because they are not authorized to speak publicly.

The cash proceeds will be used to pay some of the $1.17 billion in loans the company took out to finance the purchase of the Spanish carrier’s Argentina unit. However, Milei’s team has put the deal under review, prompting regulators to demand Telecom refrain from carrying out any type of legal, corporate or commercial act that implies consolidation with Telefonica for up to six months.

Authorities and competitors have argued that the deal may be a breach of anti-monopoly rules. Milei said in late February that the merger would leave Telecom with about 70% of Argentina’s telecommunications industry.

The company hired Deutsche Bank Securities Inc., Banco Bilbao Vizcaya Argentaria SA, Citigroup Inc., JPMorgan Chase & Co. and Banco Santander SA to arrange the sale.

The sale follows a string of dollar-debt offerings by Argentine companies on the back of optimism over South America’s second-largest economy, with traders cheering Milei’s moves to lift a series of currency-market regulations as part of a $20 billion program with the International Monetary Fund.

On Thursday, Pluspetrol SA launched its first debt sale abroad, following its acquisition of Exxon Mobil Corp’s assets in the country. Pricing guidance suggests that the oil driller will issue benchmark-sized bonds that carry a yield of around 8.875%.

--With assistance from Michael Gambale and Brian Smith.

(Updates with size of sale and price guidance in second paragraph and adds context starting in sixth)

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