Pan American Energy, Argentina – A Relationship Spanning Over 20 Years
Over the last 20 years, Pan American Energy LLL (PAE), a joint venture between BP plc and Bridas Corporation, has grown to become the second largest oil and gas producer in Argentina and IFC has been there every step of the way.
During more than two decades of partnership IFC has become PAE’s trusted financier and advisor in areas such as insurance services, social issues and community development.
In 2007, PAE needed to raise funds for an expansion project at a time when credit markets were still recovering from Argentina’s financial crises. IFC secured a record breaking long-term debt package for PAE - a $150 million loan from IFC’s own account and a $400 million syndicated loan. 2007 Financing Package – $550 million syndicated corporate loan
Largest unsecured corporate financing for Argentine borrower since 2001/2002 economic crises.
Deal was oversubscribed by 70%, allowed upsizing of syndication through IFC’s B-loan program from $275 million to $400 million.
Longest tenor for Argentine corporate borrower since 2001/2002 economic crises.
Widely syndicated to 12 banks from 7 countries: France, Germany, Belgium, the Netherlands, Korea, Brazil and Spain.
Insurance Advice: IFC’s in-house insurance specialists worked with PAE to review its insurance policies and helped the company adopt new methods of risk identification, analysis, and provided insurance market updates and insight on marketing strategy. IFC’s extensive work with PAE has resulted in broader coverage terms and substantially lower premiums for PAE.
Community Development Programs IFC helps oil and gas companies reduce their business risk by bringing benefits to local communities and earning a social license to operate.
PAE and IFC are cooperating in ensuring that the benefits the company brings to local communities are fully maximized.
Giving advice and facilitating start-up financing and to young entrepreneurs who want to start small business.
Training state governments and municipalities in the best ways to use increased tax revenues in their communities.
Educating local groups and individuals on how to start and run successful small businesses.
A Long Term Relationship 1986: $21 million loan to Bridas SA PLC 1992: $130 million in equity and senior loans 1995: $50 million loan to Bridas Corporation 2005: $250 million loan to fund PAE’s capital expenditure program 2007: $550 million loan to fund PAE’s capital expenditure program
“IFC’s team concluded our complex $550 million financing arrangement in a highly efficient manner and a very fast turnaround time. With IFC’s presence, we have been able to set a new benchmark for Argentine companies in long-term financing from international commercial banks.” Rodolfo Berisso, VP Finance and Planning, Pan American Energy, Argentina