08/17/2021 12:01 PM
Clarín.com
Economy
Updated 08/17/2021 1:12 PM
Ten days after the province of Buenos Aires formalized the amendment to the offer for the exchange of debt in dollars that it had made to its bondholders at the end of July, and
he Ad Hoc Group of its creditors, which
represents the majority of Buenos Aires bondholders, rejected the agreement.
In a statement, its members, who
say they have more than US $ 1,200 million of the provincial debt,
affirmed that this agreement "
was defective and did not represent a negotiation process in good faith."
"Unfortunately, the Province rejected all the suggestions of the Ad Hoc Group (“ GAH ”), which represents the
interests of the majority
of the Province's bondholders," the letter to the market remarked.
"Instead,
the Province chose to negotiate with a single minority bondholder.
The result of the offer structure reflects the vision of this single bondholder and is aligned with the needs of its portfolio and history of acquisitions," said this group of bondholders.
That bondholder is GoldenTree Asset Management.
The Buenos Aires administration had announced that it had reached an agreement with a significant part of the holders of the more than US $ 7.1 billion of provincial debt.
"Coercive elements were used extensively
in the structuring of the offer that represent an abuse of the collective action clauses", complained this group of creditors, who assured: "Instead of enlisting all the bondholders behind a broad and Once agreed upon,
the offer penalizes bondholders who disagree
with a material difference in recovery, in relation to those who approve the offer. "
In addition to criticizing the terms and conditions proposed by the Axel Kicillof government, these bondholders
tried to be "cynical" the way the negotiation was carried out "which included 21 failed offers"
and announced that "it will have a negative impact on the reputation of the Province. in international credit markets ".
Since April 2020, the payment of the provincial debt was suspended and the negotiation deadline included more than 20 deferrals.
"The
contrast
between the province's approach and the good faith negotiations held by nine provinces, which culminated in restructuring with broad support, has become clear," the letter concluded.
When it was announced, the provincial government maintained that the agreement it had reached with the main creditor entailed "a reduction in total services during the 2020-2024 period of approximately US $ 4,450 million (equivalent to 75% of the original commitments)" and that "the repayment terms (average life) will be tripled, while there will be a significant reduction in the total cost of the debt: the maximum coupon that the Province had to face prior to the restructuring will be reduced by about 40%, while the average coupon will be reduced to 5.6% ".
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