Magazine article American Banker

In a First, Argentina's Banco De Galicia Planning a $200 Million Yankee Bond

Magazine article American Banker

In a First, Argentina's Banco De Galicia Planning a $200 Million Yankee Bond

Article excerpt

Banco de Galicia y Buenos Aires SA plans to issue a $200 million Yankee bond. becoming the first private Latin American bank to raise debt in the U.S. domestic market.

The 10-year issue be lead managed by Goldman Sachs and Merrill Lynch, said Hector E. Arzeno, head of the Argentine bank's U.S. representative office in New York.

It will probably be priced sometime in November, Mr. Arzeno said.

Dollar Funding Needed

Approximately 50% of the bank's assets is in U.S. dollars, and Galicia needs dollar funding to manage its dollar-based lending.

The bank said in a statement that proceeds of the offer will be used to fund residential mortgages and consumer loans and to make loans to corporate clients.

The bank has already raised funds through several bond issued on the Euromarkets, including a $50 million, three-year bond privately placed recently, but has so far refrained from attempting to tap the U.S. market.

Last Friday, Moody's Investors Service assigned a rating of B1 to the $200 million senior debt obligation Galicia plans to issue as well as a B1/Not Prime rating to the bank for its long-term and short-term deposits.

Sovereign Ceiling

Moody's said the ratings were constrained by Argentina's sovereign ceiling of B1 for foreign currency obligations.

In a subsequent release, Standard & Poor's Corp. said it assigned a BB-minus rating to the bonds.

The agency added that the only thing preventing a higher rating was the BB-minus assigned to Argentina. …

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