Argentina’s Chaco province gets requisite consents for 9 3/8% notes

Chicago, June 24 – The Argentine province of Chaco announced the receipt of the requisite consents relating to its consent solicitation for its $250 million outstanding 9 3/8% senior notes due in 2024 (Cusips: 157223AA6, P2389CAA1), according to a press release.

The province received consents from noteholders representing $233,349,000, or 93.34%, of the notes by the 5 p.m. ET June 23 deadline.

The province will pay $19,023,437.54 in cash and issue $12,682,262 principal amount of additional notes as consent consideration to eligible bondholders.

The consideration is expected to be paid on June 25.

After settlement, there will be $262,682,262 of the notes outstanding.

The supplemental indenture is expected to become operative on the settlement date.

Amendment recap

The province sought to extend the maturity date of the notes until Feb. 18, 2028.

Noteholders irrevocably waived the right to receive any interest and any default interest through the settlement date. After the settlement date, the province shall agree to pay interest semiannually starting on Aug. 18.

The interest rates were amended, based on a step-up schedule. The starting rate is 3½%, steps up to 4¾% on Feb. 18, 2022, moves up to 6½% on Feb. 18, 2023 and then will be 8¼% starting Feb. 18, 2024.

The amortization schedule was amended to nine equal semiannual installments that start with the payment date of Feb. 18, 2024.

The minimum denominations of the notes are being amended to $150,000 and then multiples of $1,000 in excess thereof, to $150,000 and multiples of $1.00 in excess thereof.

Any beneficial holder will be able to pursue a remedy under the indenture of the notes as if certificated securities had been issued to a beneficial holder.

The definition of “reserve matter modification” is being modified, along with several provisions regarding the reserve matter modification.

The percentage of noteholders necessary to amend the notes to waive any existing defaults or rescind or annul any notice of acceleration and its consequences was increased.

Additionally, noteholders agreed to rescind and annul any acceleration of the notes that may have occurred on or prior to the settlement date and otherwise waived the requirement that all payment defaults under the notes shall have been cured, waived or otherwise remedied.

The province needed consents from more than 75% of the aggregate principal amount of notes.

Details

Some of the cash consideration, $200,000, will be used to cover customary fees and costs of the ad hoc bondholder group and its members in connection with the consent solicitation.

Morrow Sodali is the information and tabulation agent (203 609-4910, chaco@investor.morrowsodali.com, https://bonds.morrowsodali.com/chaco).

The solicitation agents are Deutsche Bank Securities Inc. (855 287-1922, 212 250-7527) and AdCap Securities Ltd. (646 280-8732).

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