On July 5, 2020, the Executive Branch of the Republic of Argentina (the “Executive Branch“), through a press release announced certain terms and conditions of the amendment (the “Amendment”) to the restructuring proposal of public debt issued in foreign currency and under foreign law by the Republic of Argentina (the “Republic“) set forth in its prospectus supplement dated as of April 21, 2020 (the “Proposal”).
On July 6, the Executive Power published in the Argentine Official Gazette the Executive Order No. 582/2020, by which approved the amendment No. 1 to the Prospectus Supplement dated April 21, 2020.
The Amendment follows the International Monetary Fund’s analysis of Argentina’s debt sustainability and the guidelines set forth by the Executive Branch through Decree No. 250/2020 and Resolution No. 130/2020 issued by the Ministry of Economy, through which the Republic (i) authorized to make an exchange offer for the restructuring of US$51,652,645,202 (or its equivalent in other currencies) of public debt issued in foreign currency and under foreign law; (ii) established the maximum principal amount of public debt subject to restructuring; and (iii) authorized the jurisdiction extension in favor of foreign courts, and providing a waiver to oppose sovereign immunity defense, exclusively, with respect to claims in the jurisdiction extended and with respect to all liability management transactions and/or exchanges and/or restructurings of interest maturity services and capital amortizations of bonds of the Republic issued under foreign law
Through the Amendment, the Republic invite holders of certain bonds of the Republic (the “Eligible Bonds“) to exchange those bonds for 12 new bonds to be issued by the Republic (the “New Bonds“), in order to restructure US$66.5 billion of public debt. For further information of the Eligible Bonds and the New Bonds, see the Annexes of the Amendment.
By means of the Amendment, the Executive Branch revised and modified certain terms and conditions of the Proposal mainly to increase the consideration to be received in exchange for Eligible Bonds, by reducing principal haircut, increasing coupons and shortening maturities on the New Bonds being offered, and including a USD denominated bond due 2030 (the “USD 1.00% 2030 Bonds”) or Euro denominated bond due 2030 (the “Euro 0.500% 2030 Bonds”) to be delivered as consideration for any accrued and unpaid interest from and including the last date on which interest was paid under the Eligible Bonds up to but excluding April 22, 2020.
The New Bonds offered through the Amendment will bear interest from the date of issuance, which will be September 4, 2020, on a semi-annual basis and the first interest payment date will be in September 2021.
The delivery of USD 1.00% 2030 Bonds or Euro 0.500% 2030 Bonds in an aggregate principal amount determined by reference to accrued and unpaid interest on the Eligible Bonds tendered from and including April 22, 2020 to but excluding September 4, 2020, will only be delivered to those holders who submit and do not revoke (or have submitted and not revoked) a valid and accepted tender order before it expiration which will operate at 5 p.m. (New York City time) on August 4, 2020.
Access to the complete text of Decree No. 582/2020 can be found here.
This publication does not constitute a legal opinion on specific issues. If necessary, specialized legal advice should be sought.
For more information contact: