November 23, 2017
Saturday, November 15, 2014

Kyle Bass buys 0.54 percent of YPF

Head of Hayman Capital Kyle Bass in a file photo.
Head of Hayman Capital Kyle Bass in a file photo.
Head of Hayman Capital Kyle Bass in a file photo.
Hayman Capital head says energy firm will get investments when holdouts case is solved

Solving the long-term legal battle with the “vulture” funds will lead to many investors coming to Argentina and bringing in large amounts of dollars, being the state-controlled YPF energy company one of the main beneficiaries, according to Kyle Bass, head of Hayman Capital, who recently purchased 0.54 percent of YPF.

“Once the issue with the ‘vultures’ has passed, Argentina will attract hundreds of billions of dollars of foreign direct investment. YPF will likely be the primary beneficiary of these capital flows,” Bass told Bloomberg yesterday. “Argentina has the opportunity to reverse its balance-of-trade issues over the next several years through the development of Vaca Muerta and other non-conventional fields.”

Confident about a resolution in the holdouts case, Bass decided to buy 2.1 million YPF American Depositary Receipts, or US$79.2 million, to take a 0.54 percent stake in the energy company as of September 30, according to a filing with the US Securities and Exchange Commission and data compiled by Bloomberg. Dallas-based Hayman didn’t own YPF shares at the end of the previous quarter.

Bass owns restructured debt bonds issued under English law and sued, alongside a group of investors such as George Soros, the Bank of New York at a UK court over its failure to distribute 226 million euros of interest payment on Argentine debt, deposited by the federal government before the June 30 default but frozen by United States Judge Thomas Griesa.

Following the same path as Bass, Stanford University’s endowment bought shares in YPF and Petrobras Argentina with a market value of US$11.1 million as of September 30, according to a regulatory filing yesterday. On the other hand, Soros’s family office and Daniel Loeb’s Third Point lowered their YPF holdings in the third quarter. Perry Corp said it reduced its YPF stake by US$61 million during the same period.

In an interview with the Herald in August, Bass said he believed Argentina hasn’t defaulted and described the holdouts case as “unprecedented” and “once in a lifetime.”

At the same time, he said a settlement with the holdouts could be possible when the RUFO clause expires on December 31.

“The ‘vultures’ are going to make more money and that’s not good but it might be the necessary evil to liberate Argentines into a better life. Argentina would get access to capital markets once more and the “blue” dollar rate would be different if the conflict is solved,” Bass told the Herald back then.

Shares of YPF traded in the US have increased 0.4 percent this year to US$33.08, compared with a 10 percent increase for the Standard & Poor’s 500 Index. Meanwhile, Argentina’s bonds are trading above their five-year average on speculation Argentina will settle with holdouts and regain access to international markets once a key bond clause expires at the end of this year

Herald with online media

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Edition No. 5055 - This publication is a property of NEFIR S.A. -RNPI Nº 5343955 - Issn 1852 - 9224 - Te. 4349-1500 - San Juan 141 , (C1063ACY) CABA - Director Perdiodístico: Ricardo Daloia