YPF amends exchange offers, consents for seven notes for third time

Chicago, Feb. 1 – Argentina’s YPF SA announced a third amendment to its exchange offers and consent solicitations on Monday, according to a press release.

The transaction started on Jan. 7 and was first amended on Jan. 14 and has encountered noteholder pushback. The most recent amendment was Jan. 25.

The withdrawal deadline has been extended to 5 p.m. ET on Feb. 5, from Feb. 1 and earlier from 5 p.m. ET on Jan. 21.

The expiration time has been changed to 11:59 p.m. ET on Feb. 5 from 11:59 p.m. ET on Feb. 4.

The acceptance date is now Feb. 8, moved from Feb. 5.

The execution of the old supplemental indenture is now scheduled to take place on Feb. 11 instead of Jan. 26.

And, the settlement is now Feb. 12, moved from Feb. 11, earlier pushed back from Feb. 9.

Noteholders who already consented can revoke their proxies. The consent solicitation is governed by the third amendment. No action is necessary if a noteholder does not wish to revoke their proxy.

Recent developments

The consideration for the exchange offer of the 2021 notes has been changed and is detailed below. The cash consideration has been increased, and the amount of notes issued in exchange has been decreased.

The company also notes that Moody’s Investors Service has rated the new notes Caa3.

YPF has also obtained the CNV’s authorization to increase the amount of its frequent issuer’s program, which is one of the conditions of acceptance of old notes tendered in any of the exchange offers and proxies delivered in the consent solicitation.

Earlier amendments

The company provided a list of amendments to the offer when it last amended the solicitation. The modifications as of the last revision

• Provide for interest accrual under the new notes and their cash payment in arrears from the settlement date;

• Provide for an increase in interest rates from Jan. 1, 2023 until maturity for the new secured 2026 notes and the new 2029 notes;

• Adjust the exchange consideration to reflect the improvements in the accrual of interest on the new notes from the settlement date;

• Amend the interest payment dates for the new secured 2026 notes and principal amortization schedules for the new secured 2026 notes and the new 2029 notes;

• Amend the final stated maturity for the new secured 2026 notes and the new 2029 notes;

• Exclude the possibility of issuing additional new secured 2026 notes after the settlement date;

• Add certain covenants to the terms and conditions of the new notes;

• For the new secured 2026 notes, increase the amount of the cumulative 12 months export collections required to flow through the export collection account from 110% to 120% of the principal and interest payments due within 12 months of the date of determination;

• Increase the cash balance required to be held in the reserve and payment account to 125% of the principal and interest due on the two next succeeding quarterly payment dates under the new secured 2026 notes;

• Include a pledge on certain shares held by YPF in YPF Energia Electrica SA as additional security for the new secured 2026 notes; and

• Amend the definitions of “indebtedness” and “consolidated EBITDA” for the new notes.

Exchange offers

The company launched both the consent solicitations and an offer to exchange the seven series of old notes for three new note series on Jan. 8.

Consents to the company’s proposed amendments must be delivered in order to participate in YPF’s simultaneous exchange offer. Those who wish to deliver consents must likewise tender their notes along with the consents. Consents may be revoked prior to the early exchange and deadline.

The seven series of notes and their corresponding updated exchange offer amounts are, for the

• $412,652,000 outstanding of 8½% senior notes due 2021 (ISINs: US984245AM20, USP989MJBG51), an exchange consideration of $824 of new 2026 notes and $283 cash now no interest, as interest has been calculated in the cash consideration (most recently $949 of 2026 notes and $158 cash, then previously an early exchange consideration of $1,025 of new 8½% export-backed notes due 2026 and $157 cash or a late exchange consideration of $1,182 of new 8½% export-backed notes due 2026 for each $1,000 of notes tendered);

• $1,522,165,000 outstanding of 8¾% senior amortizing notes due 2024 (ISINs: US984245AK63, USP989MJAY76), an exchange consideration of $439 of new 2026 notes and $700 of new 2029 notes (previously an early exchange consideration of $511 of new 8½% export-backed notes due 2026 and $700 of new 8½% notes due 2029 or a late exchange consideration of $1,208 of new 8½% notes due 2029 for each $1,000 of notes tendered);

• $542,806,000 outstanding of 8½% senior amortizing notes due 2025 (ISINs: US984245AT72, USP989MJBQ34), either $1,059 of new 2026 notes or $509 of new 2026 notes and $625 of new 2029 notes (previously an early exchange consideration of either $1,143 of new 8½% export-backed notes due 2026 or $583 of new 8½% export-backed notes due 2026 and $625 of new 8½% notes due 2029, or a late exchange consideration of $1,208 of new 8½% notes due 2029 for each $1,000 of new notes offered);

• $1.5 billion outstanding of 8½% senior notes due 2025 (ISINs: US984245AL47, USP989MJBE04), an exchange consideration of $121 of new 2026 notes, $650 of new 2029 notes and $350 of new 2033 notes (previously an early exchange consideration of $174 of new 8½% export-backed notes due 2026, $500 of new 8½% notes due 2029 and $500 of new 7% notes due 2033, or a late exchange consideration of $587 of new 8½% notes due 2029 and $587 of new 7% notes due 2033 for each $1,000 of new notes offered);

• $1 billion outstanding of 6.95% senior notes due 2027 (ISINs: US984245AQ34, USP989MJBL47), an exchange consideration of $100 of new 2026 notes, $250 of new 2029 notes and $750 of new 2033 notes (previously an early exchange consideration of $144 of new 8½% export-backed notes due 2026 and $1,000 of new 7% notes due 2033, or a late exchange consideration of $1,144 new 7% notes due 2033 for each $1,000 of new notes offered);

• $500 million outstanding of 8½% senior notes due 2029 (ISINs: US984245AS99, USP989MJBP50) an exchange consideration of new 2026 notes and $1,000 of new 2023 notes (previously an early exchange consideration of $182 of new 8½% export-backed notes due 2026 and $1,000 of new 7% notes due 2033, or a late exchange consideration of $1,182 new 7% notes due 2033 for each $1,000 of new notes offered); and

• $750 million outstanding of 7% senior notes due 2047 (ISINs: US984245AR17, USP989MJBN03), an exchange consideration of $115 of new 2026 notes and $950 of new 2033 notes (previously an early exchange consideration of $153 of new 8½% export-backed notes due 2026 and $950 of new 7% notes due 2033, or a late exchange consideration of $1,103 of new 7% notes due 2033 for each $1,000 of new notes offered).

New notes

The three new Regulation S and Rule 144A note series will now collect interest, as of the previous amendment.

The new secured 2026 notes will have a 4% coupon until Dec. 31, 2022 and then a 9% interest rate through maturity.

The new 2029 notes will have a 2½% coupon until Dec. 31, 2022 and then will have a 9% interest rate through maturity.

The new 2033 notes will have a 1½% coupon until Dec. 31, 2022 and then a 7% coupon until maturity.

The completion of the exchanges is conditioned on the following:

• The issuance of at least $500 million of each of the three series of new notes;

• The meeting of customary conditions and receipt of certain government approvals and third-party consents; and

• Approval from the National Securities Commission.

Early instructions

To recap, as of the 5 p.m. ET on Jan. 21, the company had received tender instructions for

• 6.89% of the 2021 old notes;

• 18.07% of the 2024 old notes;

• 14.48% of the old March 2025 notes;

• 12.53% of the old July 2025 notes;

• 9.47% of the old 2027 notes;

• 9.35% of the old 2029 notes; and

• 13.76% of the old 2047 notes.

Managers and agents

D.F. King & Co., Inc. (800 848-3410, 212 269-5550, ypf@dfking.com, www.dfking.com/ypf) is the information and exchange agent for the exchange offer and consent solicitations.

Citigroup Global Markets Inc. (212 723-6106, 800 558-3745), Santander Investment Securities Inc. (212 940-1442, 855 404-3636), HSBC Securities (USA) Inc. (888 4722-456, 212 525-5552, lmamericas@us.hsbc.com) and Itau BBA USA Securities (212 710-6749, 888 770-4828) are the dealer managers.

YPF is a petroleum and natural gas company based in Buenos Aires.

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