Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>
Liquidity Profile Strengthened: The US$600m issuance at 8.625% yield replaces near-term debt with 10-year paper, effectively smoothing the maturity profile and reducing immediate refinancing risks.</li>
<li>
Regulatory Overhang Persists: While the Telefónica acquisition offers transformative synergies, significant execution risk remains due to ongoing government intervention and uncertain approval timelines, capping immediate credit upside.</li>
<li>
Relative Value Shifts to 2036s: We maintain an Overweight stance but favor the new 2036 notes</li>
</ul>



Liquidity Profile Strengthened: The US$600m issuance at 8.625% yield replaces near-term debt with 10-year paper, effectively smoothing the maturity profile and reducing immediate refinancing risks.

Regulatory Overhang Persists: While the Telefónica acquisition offers transformative synergies, significant execution risk remains due to ongoing government intervention and uncertain approval timelines, capping immediate credit upside.

Relative Value Shifts to 2036s: We maintain an Overweight stance but favor the new 2036 notes


Telecom Argentina Prices US$600m 10Y Notes at 8.625%, Extending Maturities

<ul>
<li>We upgrade Telecom Argentina to Overweight as the TMA acquisition strengthens its market position, supports operating momentum, and benefits from reduced political risk and improving macro stability.</li>
<li>Regulatory uncertainty remains meaningful, and we think clearer visibility on the Telefónica approval process and integration timeline will be critical for value realization and credit performance.</li>
<li>• We see more value in the TEOAR 2031s given their lower duration, attractive relative spreads versus the EM B Index and peers, and supportive operating trends despite weak liquidity.</li>
</ul>


We upgrade Telecom Argentina to Overweight as the TMA acquisition strengthens its market position, supports operating momentum, and benefits from reduced political risk and improving macro stability.
Regulatory uncertainty remains meaningful, and we think clearer visibility on the Telefónica approval process and integration timeline will be critical for value realization and credit performance.
• We see more value in the TEOAR 2031s given their lower duration, attractive relative spreads versus the EM B Index and peers, and supportive operating trends despite weak liquidity.


Telecom 3Q25: Stronger Margins and a More Constructive Outlook

<ul>
<li>Suzano to Acquire 51% of Kimberly-Clark’s International Tissue Business for $1.73bn </li>
<li>Vista Priced US$500mn 2033 Unsecured Notes at Par to Yield 8.5% (IPT: mid-8%) / Cemex Launches US$1bn Perpetual NC5 Notes to Yield 7.2% (IPT: 7.625%)</li>
<li>Telecom 1Q25: Margin Gains Support Credit, But Telefónica Deal Still Central / Telecom Prices US$800 Million Unsecured Bond Due 2033 at 9.5% Yield</li>
</ul>


Suzano to Acquire 51% of Kimberly-Clark’s International Tissue Business for $1.73bn 
Vista Priced US$500mn 2033 Unsecured Notes at Par to Yield 8.5% (IPT: mid-8%) / Cemex Launches US$1bn Perpetual NC5 Notes to Yield 7.2% (IPT: 7.625%)
Telecom 1Q25: Margin Gains Support Credit, But Telefónica Deal Still Central / Telecom Prices US$800 Million Unsecured Bond Due 2033 at 9.5% Yield


<ul>
<li>Argentina Secures US$20bn IMF Deal with Currency Controls Eased / Argentina: March CPI Surprise Adds Pressure</li>
<li>Initiating Coverage on Telecom Argentina: Solid Market Position but Uncertain Outlook / Mercado Libre Expands Regional Footprint with $9 Billion in 2025 Investments Across Brazil, Argentina, and Chile</li>
<li>Minerva Announces Capital increase Backed by Sponsors / Mercado Libre Expands Regional Footprint with $9 Billion in 2025 Investments Across Brazil, Argentina, and Chile</li>
</ul>


Argentina Secures US$20bn IMF Deal with Currency Controls Eased / Argentina: March CPI Surprise Adds Pressure
Initiating Coverage on Telecom Argentina: Solid Market Position but Uncertain Outlook / Mercado Libre Expands Regional Footprint with $9 Billion in 2025 Investments Across Brazil, Argentina, and Chile
Minerva Announces Capital increase Backed by Sponsors / Mercado Libre Expands Regional Footprint with $9 Billion in 2025 Investments Across Brazil, Argentina, and Chile


<ul>
<li>We are initiating coverage on Telecom with a Market Perform recommendation. We view the notes as fairly valued considering the uncertainty surrounding the potential acquisition of Telefónica.</li>
<li>Telecom maintains a strong market position, supported by its broad service scale and integrated offerings, which enhance customer retention and operational efficiency.</li>
<li>We believe Telecom is well-positioned to benefit from these trends but see a better entry point once there is greater clarity on the acquisition’s implications.</li>
</ul>


We are initiating coverage on Telecom with a Market Perform recommendation. We view the notes as fairly valued considering the uncertainty surrounding the potential acquisition of Telefónica.
Telecom maintains a strong market position, supported by its broad service scale and integrated offerings, which enhance customer retention and operational efficiency.
We believe Telecom is well-positioned to benefit from these trends but see a better entry point once there is greater clarity on the acquisition’s implications.


Initiating Coverage on Telecom: Solid Market Position but Uncertain Outlook

Argentina

Telecom Argentina SA provides telecommunications services including local, long-distance and international service in Argentina.  The Company, through its subsidiaries, also provides cellular telecommunications services and offers paging services.

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Telecom Argentina (TEO US)

Telecom Argentina Prices US$600m 10Y Notes at 8.625%, Extending Maturities

Telecom Argentina's US$600m deal eases liquidity pressure; we analyze why the new 2036 notes offer a superior entry point compared to the 2031s.

Leandro Gubler

Telecom 3Q25: Stronger Margins and a More Constructive Outlook

Telecom Argentina’s TMA acquisition, improving fundamentals, and compelling relative value create a timely opportunity for investors seeking yield...

Leandro Gubler

EM Spreads - Weekly News & Views

Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

Leandro Gubler

Weekly News & Views

Argentina secures IMF deal with eased currency controls, Telecom Argentina has solid market position but uncertain outlook, Mercado Libre expands...

Leandro Gubler

Initiating Coverage on Telecom: Solid Market Position but Uncertain Outlook

Initiating coverage on Telecom with a Market Perform rating, citing fair valuation and pending clarity on the Telefónica deal. Strong market...

Leandro Gubler

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Telecom Argentina Prices US$600m 10Y Notes at 8.625%, Extending Maturities

Telecom Argentina's US$600m deal eases liquidity pressure; we analyze why the new 2036 notes offer a superior entry point compared to the 2031s.

Leandro Gubler

Telecom 3Q25: Stronger Margins and a More Constructive Outlook

Telecom Argentina’s TMA acquisition, improving fundamentals, and compelling relative value create a timely opportunity for investors seeking yield...

Leandro Gubler

EM Spreads - Weekly News & Views

​Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

Leandro Gubler

Weekly News & Views

​Argentina secures IMF deal with eased currency controls, Telecom Argentina has solid market position but uncertain outlook, Mercado Libre expands...

Leandro Gubler

Initiating Coverage on Telecom: Solid Market Position but Uncertain Outlook

Initiating coverage on Telecom with a Market Perform rating, citing fair valuation and pending clarity on the Telefónica deal. Strong market...

Leandro Gubler

Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

Argentina secures IMF deal with eased currency controls, Telecom Argentina has solid market position but uncertain outlook, Mercado Libre expands...