Dollar shortage: what companies are offering to convince their creditors to redeem debt

10/29/2020 3:18 PM

• Clarín.com

• Economy

Updated 10/29/2020 3:18 PM

The companies indebted in dollars are advancing with the restructuring plans to which they were forced by the Central Bank due to the shortage of foreign exchange.

The first was Banco Hipotecario, which managed to exchange less than 50% of its debt and the rest decided to pay it out of pocket.

This Thursday,

(the company of the Elsztain family that owns shopping malls, offices and fields),

(the group's company dedicated to agriculture) and

, the PointState fund firm that is dedicated to renewable energy, presented their redemption plans.

Communication “A” 7106 of the Central Bank

foreign exchange

for the purchase of dollars for the payment of debt securities in foreign currency maturing

The entity

, provided that the remaining 60% is refinanced for at least two years of average life.

“Within the legal framework that the authorities have set for us, we have designed a proposal that we believe is attractive to investors.

We hope they will join us, ”said Matías Gaivironsky, CFO of IRSA / Cresud.

Last Friday both companies launched their proposal to the holders of the Negotiable Obligations (ON) that expired on November 16.

In both cases, the deadline to adhere to the exchange is November 5, and settlement will take place on November 11.

IRSA offers to exchange its Series I NOs for

maturing on November 16 and the issuance of two new Series (Classes VIII and IX).

The

provides interest accrued to the date of settlement, payment cash dollars at the least 50% of the amount redeemed Class I and the remainder in newly issued Class VIII dollar at a fixed rate of 10% per annum in 3 equal annual payments with a maturity of 3 years after the date of issuance and settlement, maximum amount US $ 108.9 million and payment address in Buenos Aires.

The

proposes interest accrued to the date of liquidation and redemption advance until October 30 2% in pesos and a new issue Class IX at a fixed rate of 10% per annum with quarterly payments bullet at maturity on 1 March 2023. Maximum amount US $ 108.9 million, expandable to US $ 181.5 million.

They will be subscribed in kind with Class I ON and / or in cash in dollars, with a New York payment address.

Cresud

, meanwhile, will exchange its NO Series XXIV for

, maturing on November 16 and the issuance of two new Series Class XXXI and XXXII.

The

provides interest accrued to the date of settlement, payment cash dollars at the least 50% of the amount redeemed Class XXIV and the remainder in newly issued Class XXXI denominated in dollars at a fixed nominal rate of 9 Annual%, to be amortized in three equal annual payments, maturing in 3 years after the date of issue and settlement, for an amount of up to US $ 44.16 million.

The subscription will be in kind, with ON Class XXIV.

Address in Buenos Aires.

The

proposes interest accrued to the date of settlement and early bird (until 30/10/20) 2% in pesos and a new issue dollar -

denominated Class XXXII at a nominal fixed rate of 9% annually and quarterly payments.

They will expire 24 months after the issuance and settlement date for an amount of up to US $ 44.16 million.

The subscription will be in kind, in exchange for ON Class XXIV.

Payment address New York.

“The swap offers two very good alternatives for current market conditions: one for those investors who wish to obtain a significant portion of cash in accordance with the BCRA restrictions that prevail today and keep the residual invested at good interest rates and another for those investors who prefer to keep all the capital invested with attractive interest coupons, with a payment address abroad and who bet on the normalization of yields for Argentine loans ”, explains Leandro Trigo, CEO of Grupo SBS.

Genneia's offer

For its part, Genneia has to restructure ON

which expire on November 23.

"The provisions of the Central Bank establish limitations on the capital payment of Class XXI NOs and set the guidelines under which they must be refinanced,

to honor its commitments," he said in a statement.

"Genneia requests the understanding of its investors and offers incentives for them to accompany the company in an exchange offer that allows it to comply with the exchange measures established by the BCRA through Communication“ A ”7106," he adds.

"This prevents the total cancellation of the Class XXI NOs for US $ 51.5 million, with Genneia having to announce a refinancing plan. This was not the initial objective of the company, which

to pay its 2020 obligations with two successive issuances of local bonds (May and August) ", said the firm.

Genneia will offer new Class XXX NOs, denominated in dollars, with a 12% coupon (interest) and bullet amortization over a 2-year term.

The payment address will be in New York.

The new ONs may be integrated by delivering the Class XXI in exchange or in cash (in dollars).

Within the option of integration in kind, the investor will collect the accrued interest up to the settlement date and will be able to choose between two options for each US $ 1 of the ON XXI.

The first, called

, offers at least US $ 0.40 cents of cash payment for the cancellation of capital of the XXI BOs plus the remainder in the new Class XXX BOs, combined with a cash consideration of 1% of nominal value, payable in pesos, if participating in the exchange before November 5.

The second option, or

, sets US $ 1 in the new Class XXX NOs, combined with a cash consideration of 4% of nominal value, payable in pesos, in case of participating in the exchange before November 5.

To reassure its creditors, Genneia recalled that more than 90% of sales are denominated in dollars under long-term contracts and more than 70% come from renewable energy assets.

In addition, more than 50% of the income is backed by FODER and Sovereign guarantees and some of its contracts are backed by the World Bank.

In the last twelve months, EBITDA (gross profit) reached US $ 250 million.

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