03/23/2021 10:49 AM
Clarín.com
Economy
Updated 03/23/2021 10:54 AM
The creditors of the Province of Buenos Aires chose the day on which the Minister of Economy Martín Guzmán meets with the head of the International Monetary Fund Kristalina Georgieva to announce the initiation of
a lawsuit in New York against the Province of Buenos Aires.
Although they accuse Governor Axel Kicillof of pursuing a
confrontational path
rather than negotiating, they leave a door open to resume talks on debt restructuring.
Members of the so-called "Ad Hoc Group of Bondholders of Buenos Aires", who have in their possession eleven series of Buenos Aires obligations with a total capital amount of
more than US $ 7.1 billion
, filed a lawsuit against the Province on Tuesday in the United States Court for the Southern District of New York, in relation to the "
continued default of
scheduled
payments
of interest and / or principal under each of these series of Bonds," they reported.
The Province, the bondholders say, stopped making scheduled payments on the bonds in April 2020 and, since then,
has defaulted on its payment obligations on all series
.
"Since April, the Province
has made virtually no effort to enter into good faith negotiations
with the Group (the bondholders) in order to find a mutually acceptable and consensual solution, despite several attempts to engage in discussions on the part of the Group and its advisors, "the creditors said in a statement.
"Instead of looking for a solution, provincial officials
have repeatedly chosen to extend the deadline
for accepting a failed restructuring offer that is
disconnected
from the province's
real financial capacity
and which, therefore,
has never achieved the support of the bondholders, "they
explained.
The province postponed the deadline to negotiate 13 times and the last extension expires this Friday.
The bondholders recalled - as the Buenos Aires government reported on Sunday - that recently, the Province had restricted conversations with GoldenTree Asset Management, one of the main creditors that is also a member of the Group.
"Notably,
the Province authorities rejected GoldenTree's request that the entire Steering Committee be invited to participate in the discussions
. In any event, the terms of the restructuring that the Province discussed with GoldenTree, and which were made public on March 21, they
were rejected
by GoldenTree and the Steering Committee and remain
very far
from the terms that the province's international bondholders would consider acceptable, "they detailed.
"Actions speak louder than words and it
is regrettable that the provincial leadership has chosen to follow a course of confrontation
and default with its international bondholders
instead of a path of negotiation and compromise,"
accuse the creditors.
And they warn that, in the long term, the cost of choosing the confrontation will fall on the population and companies.
"Without access to capital and a hostile investment environment, job creation, business activity and economic growth will continue to suffer," they say.
The group of bondholders tell Kicillof that there have already been 8 provinces that have restructured their debt through dialogue in good faith with their respective international bondholders, in contrast to the position of the authorities of the Province.
"This unfortunate situation has left the members of the Group, who have fiduciary duties towards their own investors, with
no other option than to exercise contractual actions available to them through the courts of New York
.
"
According to the Group itself,
their support is necessary
for a successful restructuring and "the individual institutions that have initiated litigation today
remain united
by insisting that the Province must enter into meaningful and good faith negotiations with the Group if it truly seeks to reach a consensual solution ".
In any case, the bondholders did not close the door: "The members of the Group who have presented claims today
remain open to consider proposals
from the Province. In the meantime, they intend to vigorously pursue the legal procedures that have begun today and are reserved in their full rights to
exercise any other action
or additional remedy at any time ".
NE
Look also
While Buenos Aires tries to convince the bondholders, Jujuy closed the restructuring of its debt
Provincial debt: on Friday the deadline for creditors to accept the offer expires