Argentina’s Neuquén Province is set to present to foreign investors in New York its inaugural international bond issuance in almost ten years, as the local government capitalises on the benefits of a shale oil boom, according to two individuals with direct knowledge of the situation. Provincial officials are set to embark on an investor roadshow on Wall Street commencing July 20. They are looking to obtain a bullet bond with interest rates between seven percent and eight percent, and a maturity period of five to seven years, as per sources. Neuquén’s legislature has approved the issuance of up to US$500 million in new bonds, marking the province’s first such endeavour since 2017.
As President Javier Milei refrains from re-engaging the national government with global markets at this juncture, Argentina’s provinces are capitalising on the investor optimism surrounding his economic reforms to issue new bonds internationally. If Neuquén proceeds with the issuance, it would align with Córdoba, Chubut, and Buenos Aires City, among others, that have engaged in foreign sales in recent months as bond spreads have contracted. Oil and gas companies operating in Neuquén, including Pampa Energía SA and Pluspetrol SA, have engaged with global markets to capitalise on the positive sentiment surrounding Argentina’s energy prospects.
The province is experiencing a shale oil and gas boom in a remote area of Patagonia, which has gained new importance as companies invest billions of dollars. Production is expected to escalate, aiming to achieve one million barrels a day of oil by the decade’s end. An added incentive emerged recently as Milei’s government revised its investment programme, RIGI, to permit shale drilling projects to be eligible for tax breaks and legal protections. That change has attracted significant projects from producers such as Chevron Corp.