Argentina’s Clisa seeks full PIK payment for step-up notes due 2027

By Wendy Van Sickle

Columbus, Ohio, Jan. 11 – Argentina’s Compania Latinoamericana de Infraestructura & Servicios SA (Clisa) is asking holders of its outstanding step-up senior secured notes due 2027 (Cusips: 20445PAH8, P3063XAJ7) to consent to an amendment to the note indenture that would alter the payment of interest due on Jan. 25, according to a news release.

Specifically, the amendment would, for the interest period from July 25, 2023 through Jan. 25, eliminate the portion of the coupon paid in cash in lieu of an 8½% in kind payment, rather than 6¼% in cash and 2¼% in kind, as currently called for.

The proposed amendment requires the consent of holders of at least 75% of the outstanding notes.

If the requisite consents are received, the company will pay a total consideration of $3.25 million to be divided pro rata among consenting noteholders.

The company said it has had discussions with an ad hoc committee of holders representing a majority of the principal amount of the outstanding notes and that the group has indicated that it intends to consent to the proposed amendment, but Clisa cannot assure that the group will effectively provide its consents or that the requisite consents will be obtained.

The consent solicitation will expire at 5 p.m. ET on Feb. 9. Consents may be revoked until the earlier of the expiration date and the time the requisite consents are obtained.

Clisa said it is soliciting the consents of the noteholders due to the adverse impacts on its economic, financial and cash position as a result of the deterioration of the Argentine macroeconomic scenario throughout 2023 and the most recent developments, particularly soaring inflation, which it cited at 12% per month in November and more than 20% per month expected in December and January, that has been significantly impairing the company’s accounts receivable denominated in Argentine pesos and significantly reducing the purchasing power of its collections in that currency; the 118% devaluation of the Argentine peso in December; and the Argentine government's announcement of drastic reduction in public works.

Clisa said the consent bid is geared toward alleviating its cash flow constraints caused by the adverse Argentine macroeconomic scenario and its impact on the company’s business segments.

The consummation of the solicitation and payment of the consent fee is conditions on receipt of the requisite consents.

BCP Securities, Inc. (Attn: James Harper, 203 629-2186 or jharper@bcpsecurities.com) is the solicitation agent outside Argentina, and Banco CMF SA (Attn: Mercado de Capitales, +54 11 4318-6800 or mercadodecapitales@bancocmf.com.ar) is the solicitation agent in Argentina.

Morrow Sodali International LLC (clisa@investor.morrowsodali.com, 203 658 9457, +44 4513 6933) is the information and tabulation agent.

Clisa is a Buenos Aires-based infrastructure manager and developer with construction, waste management, transportation and water supply services as its principal business segments.

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