07/21/2021 8:48 AM
Updated 07/21/2021 8:48 AM
After having extended the negotiations 20 times (the last term expired next Friday, the province of Buenos Aires finally managed to reach an agreement with its main creditor to direct the restructuring of a debt that reaches US $ 7,000 million.
The government of Axel Kicillof reported this Wednesday that it reached an agreement with its main creditor and other bondholders "on terms and conditions that will allow
amending the formal invitation to exchange
for new bonds and
move towards the completion of the restructuring process
of debt with private parties under foreign legislation.
Pablo López, the Buenos Aires Minister of Finance and Finance, still has to work to reach the closing of a restructuring.
support obtained is key
to launching a definitive exchange proposal.
"The new terms will imply a
reduction in total services
during the 2020-2024 period of approximately US $ 4,450 million (equivalent to 75% of the original commitments), the repayment terms (average life) will be tripled, while the an important
reduction in the total cost of the debt
that the Province had to face prior to the restructuring will be reduced by
, while the average coupon will be reduced to 5.6% ".
"This is a key step to recover a
sustainable debt profile,
according to our ability to pay and the enormous difficulties that we must face, also taking care of the impact of the provincial debt on our macroeconomy," López said in a statement released by the province.
Kicillof's management had already extended the swap 20 times
since April 2020
and had been the subject of strong criticism from bondholders.
In March, the first 40 funds had been presented
in three court cases in New York,
with a holding of US $ 2.1 billion, 29% of the total, and claims for the payment of US $ 366 million in arrears and past due interest.
And in early July, the ad hoc group of holders confirmed that the US Bank National Association joined the bondholders' claim,
raising the demand for past due interest to US $ 1,637 million.
This Friday, in addition to the extension of the term to negotiate, the Province also had to present the arguments of its request to dismiss the lawsuit against it, while on August 13 it was the turn of the bondholders.
Now we will have to see
if the trial goes ahead.
Kicillof in the crosshairs: a bank files a mega lawsuit in the US for the debt in default
New demands for the default of the Buenos Aires debt: the bondholders demand US $ 1,638 million.