The Argentine province of Salta has finally priced a much anticipated first-ever royalty-backed deal for $234 million.

The transaction is backed by future flows of the royalties Salta receives from the exports of oil and natural gas. Economic turbulence deterred the deal from closing last November, however it is now scheduled to close on February 15.

The coupon is 11.55% with an expected maturity of Oct. 2012 and a legal maturity of Oct. 2015. The province was also initially seeking $250 million.

The deal has the benefit of transfer and convertibility risk protection. Ace Bermuda Insurance Limited is the insurance company and Lehman Brothers structured the deal. Additionally, the issuer achieved a true sale of assets and there is little opportunity for third party intervention, including the Province of Salta and the Argentine government.

Standard & Poor's, Moody's Investors Service, and Fitch rated the transaction triple-B-minus (or the equivalent).

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