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Paolo Rocca, the chairman and CEO of Tenaris, we can support the Russian and CIS oil and gas
said last year that co-operation with Russia industry with a world-class and very competi-
would benefit his company. tive alternative for high quality OCTG products
“We are very pleased to form this partnership and services. As in all our operations around the
today with Severstal,” he commented. “By com- world, we seek to deliver solutions that help to
bining our respective strengths and our com- make customer operations more efficient and
mitment to industrial excellence, we believe that cost-effective.” ™

Argentina’s CGC proposes bond swap

COMPAÑÍA General de Combustibles (CGC) downgrading CGC in response to the proposed
has joined the ranks of Argentinian companies bond swap. The company’s long-term foreign
offering a bond swap. Last week, the independ- currency (FC) and local currency (LC) issuer
ent oil and gas company said it was looking to default ratings (IDRs) will drop from CCC to C,
tender an exchange of $300mn worth of sen- and the 2021 bond issue’s rating will be down-
ior unsecured bonds due to mature in 2021 for graded from CCC/RR4 to C/RR4, it stated.
securities that will be repaid in 2025. The ratings agency explained the down-
CGC, which is the largest producer of nat- grade by pointing out that CGC’s plan met its
ural gas in Argentina’s onshore Austral Basin, criteria for a distressed debt exchange. “There is
intends to offer bondholders the chance to swap a material reduction of the original terms due
their notes up until September 2. It has proposed to the proposed exit consent solicitation, and
carrying out the exchange in two stages, includ- Fitch believes the exchange is being conducted
ing an early consideration period ending on to avoid a payment default at maturity,” it said.
August 19 and a late consideration period end- “The solicitation proposes stripping
ing on September 2. non-participating noteholders of their existing
During the early consideration period, par- covenants (i.e., restrictive covenants and certain
ticipating investors would be entitled to a 10% events of default) of the $300mn notes indenture
pay-out and the re-financing of 95% of their ... Fitch views these proposed amendments as a
original principal. During the late consideration material reduction in the terms that dilutes the
period, they would be entitled to a 5% pay-out bonds holders’ original rights,” it added.
and the re-financing of 95% of their original The company will need to secure the approval
principal. of at least 50% plus one of all bondholders of the
The 2025 bonds involved in the exchange outstanding aggregate principal of the 2021
carry a coupon of 9.5%, the same as the 2021 securities issue to move forward with the swap,
notes. “The new notes will amortise semi-annu- the ratings agency said.
ally in six payments, with the first five amortisa- CGC is mostly active in Argentina’s south-
tion payments equalling 13.3% of the original ern Santa Cruz Province. It has operating and
amount between September 2022 and Septem- non-operating stakes in 40 crude oil and natural
ber 2024,” Fitch Ratings noted in a press release. gas fields in Santa Cruz and serves as operator
“The final payment of 33.5% will mature in of the Angostura block in the Neuquen Basin.
March 2025.” Additionally, it is a non-operating partner in the
US-based Fitch went on to say that it was Aguaragüe block in the Northwestern Basin. ™

CGC and Echo Energy are working together in Argentina’s southern Austral basin (Photo: Echo Energy)

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