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Debt: despite the Province's announcement, some bondholders still resist the agreement

2021-07-22T06:51:09.527Z


The AdHoc group says it was not invited to learn about the new proposal. In the Province they say that the accessions would already be close to 50%. They need 75%.


Rodolfo Lara

07/21/2021 5:31 PM

  • Clarín.com

  • Economy

Updated 07/21/2021 5:31 PM

Almost simultaneously with the agreement with the main creditors to close the debt restructuring for US

$ 7,148 million,

which includes a stretch in the maturity profile to eleven years and postponement of principal payment terms for three years, a group of intransigent bondholders

rejected the Axel Kicillof government's proposal.

It is about the

Ad Hoc group

that, according to its spokesmen,

represents 40% of the bondholders of the Province, a figure that is considered "exaggerated" by the Buenos Aires authorities and by people in the market close to the negotiation

.

It is a "partial reaction" in the consideration of Buenos Aires Finance officials.

This Wednesday, after 20 extensions, started in April 2020, the provincial Ministry of Finance announced an agreement with the majority group of holders of Buenos Aires securities.

This approach allows a 75% reduction in payments until 2024. Equivalent to US $ 4.45 billion.

With this advance, the offer will be formalized next week.

For acceptance, the account runs until August 13.

The government's preliminary agreement, so far, is with GoldenTree Asset Management, its main external creditor, and other bondholders.

Market sources assured this newspaper that the

Golden Tree

fund

is today the largest bondholder.

It is speculated that once the agreement announced today is known, other bondholders will join the membership.

The calculations among those who closely follow the negotiations is that the Province would have already achieved the adhesion of 50% of the bondholders.

To close the way to lawsuits in New York it should reach at least 75%.

"They are close"

summary in the market.


As

Clarín

advanced

,

in the final letter of the negotiation, it is determined that

no annual payment may exceed 900 million dollars until 2030

.

In addition, there is a reduction in total services during the 2020-2024 period equivalent to 75% of the original commitments (US $ 4.45 billion).

The repayment terms (average life of the debt)

go from three years to eleven years

.

Also the maximum coupon is reduced by 40%, while the average coupon will be reduced to 5.6%.

In the previous letter of commitment, the annual payments under the pre-exchange scheme reached up to US $ 2.4 billion per year.

According to the explanation of the minister of the area, Pablo López, unsustainable in time and "priceless."

Even with the promising spirit of this Wednesday in the Kicillof administration, the Ad Hoc group offers resistance and emphasizes that it

does not endorse the agreement.

"The province chose an unfortunate path to launch its offer that involved bilateral discussions with certain selected bondholders," the statement said.

In the vicinity of the negotiators for the provincial administration, they respond that "different rounds of negotiations were carried out with the entire Ad Hoc Group of creditors. Within the framework, the legal and financial advisers of the entire Committee were present. Therefore, the accusation is false. against the Province of not acting in good faith ".

Look also

Debt: Axel Kicillof reaches an agreement with its main creditor a year after Nación

Buenos Aires debt: how is the fine letter of Axel Kicillof's agreement with the bondholders

Source: clarin

All business articles on 2021-07-22

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