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Debt in dollars: Neuquén reached an agreement and is the third province to close an exchange

2020-11-26T04:32:50.816Z


Thus he joined Mendoza and Chubut. Buenos Aires is still in negotiations.


Mary Church

11/25/2020 6:00 AM

  • Clarín.com

  • Economy

Updated 11/25/2020 6:00 AM

Neuquén

reached an

agreement

with the

debt creditors of the under foreign law

for which it will exchange two titles for a total of US $ 683 million.

This was announced on Tuesday by the governor of that province, Omar Gutiérrez, at a press conference, accompanied by his Minister of Economy, Guillermo Pons.

Neuquén is one of the three provinces that sought to restructure their debt but had their bonds guaranteed with oil royalties.

Of the other two,

Chubut has

already closed an agreement in principle with its bondholders and now there is progress in

Tierra del Fuego

.

In turn, Neuquén became the third province to close an exchange with its creditors, after

Mendoza

and

Chubut

.

At the end of October, Neuquén had announced that it was not going to pay an interest maturity on a bond.

The 30-day grace period was taken in order to pressure the bondholders to reach an agreement.

Days before the deadline, Gutiérrez announced the agreement with the creditors and stressed that

the agreement was reached without going into default

.

In addition, in a political gesture, he highlighted the national support through the Minister of Economy Martín Guzmán to extend the maturities of the Ticade and Tideneu bonds, "in the face of the complex scenario of the pandemic."

"We have exceeded the majorities necessary for the restructuring of the Tideneu and Ticade bonds, issued in a timely manner by the province, the capital amounts involved in both bonds total 683 million dollars," the president reported.

He explained that each bond required consent,

a minimum guarantee of 75%

, which was exceeded.

For his part, Minister Pons explained that the new maturities of Ticade and Tideneu present financial relief.

"We have expectations that we can deal with the budget format that we present a better 2021," added the minister.

Pons completed that "the amendment or this consent format requires a minimum majority of 75% and once it is approved it applies to 100% of the bondholders."

With the agreement reached, Neuquén

extends the maturities of its bonds until 2030

and reduces interest rates to achieve financial relief until 2024.

For the Ticades, guaranteed with hydrocarbon royalties and that today yield an annual interest rate of 8.625%, the government will reduce the interest coupons to 5.17% in 2021 but they will come to maturity with the original rate, published the newspaper of Black river.

As for the Tideneu, which have no guarantee and today pay an interest rate of 7.5%, the reduction in coupons will be 2.5% in the first tranche until it reaches 6.875% until the expiration date.

Chubut and Mendoza

Weeks ago,

Chubut

announced that it reached a "principle of agreement" with the majority of the bondholders who are creditors of securities for US $ 650 million that expire in 2026 and that are guaranteed by oil royalties.

Mendoza was the first

to close an agreement with creditors for a total of US $ 530 million.

He did it at the end of September.

More than 10 Argentine provinces are advancing with

dollar debt

restructurings

under foreign legislation issued in recent years.

The one with the highest amount is the province of Buenos Aires.

The Axel Kicillof government seeks to exchange securities for about US $ 7.15 billion.

The latest news came from the side of a new extension (the ninth) of the negotiation period until December 4.

"This extension materializes after learning that the bondholders' committee has replaced the firms that advise them on legal and financial matters," it was said.

That is why it calls for "to resume the talks in good faith that will allow us to reach a constructive solution to the problem of unsustainability of the debt with private companies under foreign legislation," the Buenos Aires statement said days ago.

Pooled bondholders

In the middle of the negotiations, a group of bondholders reported on Tuesday that they came together under the

"Coalition of Bondholders of Argentine Provinces"

(CBPA), a group formed by fund managers with investments of more than US $ 3,000 million in bonds issued by Argentine provinces, they said.

“The CBPA represents institutional and retail investors in the Argentine provincial bond market.

In particular, we try to ensure that negotiations on debt restructurings, where necessary, are conducted

in a fair and principled manner

.

Failure to do so would endanger the future of this market, to the detriment of the provinces and their residents, ”they added.

NE

Source: clarin

All business articles on 2020-11-26

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