August 4, 2020

Group of creditors of Argentina confirms presentation of counteroffer


Buenos Aires, May 16 (EFE) .- A group of private creditors from Argentina confirmed this Saturday the presentation of a counter-offer to exchange foreign law bonds and assured that their proposal will guarantee “substantial relief” for the South American country, which is seeking restructure titles for $ 66,239 million.

The so-called Exchange Bond Holders Group stated in a statement that its counterproposal offers a “comprehensive approach” to restructure the bonds issued with the 2005 and 2010 swaps that entered into the restructuring offer launched by Argentina on April 22.

According to this group of creditors, his proposal “respects both the principles articulated” by the group of bondholders and the “current economic conditions” of Argentina, whose economy was in recession two years ago.

The group assured that the terms included in its counteroffer will allow the South American country a “substantial relief of ‘cash flow’ (cash flow) through a combination of deferral of interest payments, decreases in coupon payments and deferral of amortization payments. ”

This group of creditors, made up of 18 investment funds that claim to own 15% of the Argentine bonds issued with the 2005 and 2010 swaps, said that their offer was presented at the same time as the one made by the Argentine Creditors Committee ( ACC) with the Gramercy and Fintech Advisory funds.

This other set of creditors are holders of bonds issued by Argentina after 2016 and which have also been included in the restructuring proposal launched by the South American country.

According to the Group of Exchange Bond Holders, these two “coordinated counter-proposals represent a good faith effort by these groups to provide a coherent basis for expedited restructuring” of Argentine foreign-law bonds and “a sustainable debt profile long-term”.

Late last Friday, the Government of Alberto Fernández confirmed the receipt of three counter-offers, but did not give details of their content or specify who presented them.

THE ARGENTINE OFFER

The proposal launched by Argentina on April 22 includes a three-year grace period, that is, to start paying newly in 2023 coupons with an initial rate of 0.5%, which would gradually increase to an average interest rate of 2.33 % and a maximum rate of 4.875%.

It also implies a deduction of 5.4% on the owed stock and 62% on the interest.

The offer was flatly rejected by various groups of creditors.

The initial term of adherence to the proposal expired on May 8, but the Argentine Government decided to extend it until next Friday 22 due to its low level of acceptance.

Also on Friday, the thirty-day grace period that Argentina accepted when it did not pay an interest maturity of $ 500 million on three bonds included in the exchange offer expires.

If by that day Argentina does not reach an agreement with creditors and does not regularize the payment of that commitment, the country would enter into a selective cessation of payments.

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