Argentina’s Entre Rios solicits consents to amend 8¾% notes due 2025

By Taylor Fox

New York, Feb. 22 – Argentina’s province of Entre Rios began a consent solicitation to amend its $500 million outstanding 8¾% notes due 2025 (ISIN: US29384NAA28, USP37341AA50), according to a news release.

As previously reported, the province reached an agreement with an ad hoc group of bondholders representing 58% of the notes outstanding regarding the proposed amendments. The group is expected to support the province’s proposal to amend the notes by submitting their consents to the proposed amendments.

Upon the successful consummation of the consent solicitation, the group is expected to withdraw the claim filed by some entities under the management of group members on Jan. 4 in the U.S. District Court for the Southern District of New York seeking a judgment against the province.

Following approval by a 75% majority of the holders of the existing notes, the existing notes will either be exchanged for new notes or the existing notes will be amended. In effect, the province will be granted significant debt service relief in the form of coupon reductions and maturity reprofiling, according to the news release.

The consent solicitation will expire at 5 p.m. ET March 8.

Eligible holders who validly deliver a consent on or prior to the expiration time will be eligible to receive as consent consideration a pro rata share of the amount of accrued and unpaid interest on all outstanding notes from Feb. 8, 2020 to but excluding Feb. 8, 2021, of which 60% will be paid in cash and 40% will be paid by the issuance and delivery of additional notes.

By delivering their consents, holders will be deemed to have instructed the province to apply on the settlement date an amount of $1 million from the cash consent consideration to cover certain fees and costs of the group and its members relating to or in connection with the consent solicitation.

The ad hoc group comprises major institutional holders of the province’s external debt, including funds managed or advised by GML Capital LLP, GoldenTree Asset Management LP, Redwood Capital Management, LLC and VR Advisory Services Ltd.

The members of the ad hoc group are advised by White & Case LLP in the restructuring discussions with the province and by Quinn Emanuel Urquhart and Sullivan, LLP in connection with the legal claim in the New York court.

HSBC Securities (USA) Inc. is the solicitation agent.

D.F. King is the information and tabulation agent for the consent solicitation.

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