Gas Andes, a pipeline that runs natural gas from Argentina to Chile, is looking for a financing mechanism for the pipeline itself. The company is considering both wrapped and unwrapped offerings.
The pipeline was completed in 1997 and has been operating since then. According to sources, the pipeline had bank debt and is now looking to take it out in the bond market. The only revenues of the pipeline are the contractual revenues it receives from the gas companies in Chile that buy the gas and pay Gas Andes for the shipping of the gas. While it is not a true securitization one market source said, "Essentially it's like a securitization of the future tariffs, but it's not technically that - it's a pipeline issuance."
According to other market sources, the deal will take a long time to be completed as a result of Argentine risk as well as distractions from the Brazil energy crisis. The deal will be dollar-denominated and will be rated by at least two of the three main rating agencies.
