Argentina extends exchange offer for $64.8 billion bonds to June 19

By Wendy Van Sickle

Columbus, Ohio, June 12 – The Republic of Argentina announced it is extending the expiry of its offer to certain holders of its foreign currency external bonds to exchange those instruments for new bonds.

The offer will now expire at 5 p.m. ET on June 19, pushed out from 5 p.m. ET on June 12, according to a news release.

The settlement date is now expected to be June 25.

About $64.8 billion of bonds are eligible to participate in the exchange offer, as previously reported.

The eligible bonds include 12 series issued under the republic’s indenture dated June 2, 2005 and 17 series issued under the indenture dated April 22, 2016.

The aggregate amounts of all dollar-, euro- and Swiss franc-denominated eligible bonds currently outstanding are $45,245,788,571, €17,492,265,199 and CHF 400 million, respectively, according to a prospectus supplement.

The offer was announced on April 21 and was initially set to expire at 5 p.m. ET on May 8.

Eligible bonds

Holders of the following outstanding 2005 indenture bonds are eligible to participate in the offer:

• $3,937,610,834 discounts due 2033 (New York law) issued in 2005 (ISIN: US040114GL81);

• $1,226,835,747 discounts due 2033 (New York law) issued in 2010 (ISIN: XS0501194756);

• $7,930,869 discounts due 2033 (New York law) issued in 2010 (ISIN: XS0501195050);

• €3,107,569,663 discounts due 2033 (English law) issued in 2005 (ISIN: XS0205545840);

• €2,656,769,079 discounts due 2033 (English law) issued in 2010 (ISIN: XS0501195134);

• €4,703,359 discounts due 2033 (English law) issued in 2010 (ISIN: XS0501195308);

• $5,005,659,942 pars due 2038 (New York law) issued in 2005 (ISIN: US040114GK09);

• $93,304,820 pars due 2038 (New York law) issued in 2010 (ISIN: XS0501195647);

• $1,634,359 pars due 2038 (New York law) issued in 2010 (ISIN: XS0501195720);

• €5,034,912,168 pars due 2038 (English law) issued in 2005 (ISIN: XS0205537581);

• €1,427,127,806 pars due 2038 (English law) issued in 2010 (ISIN: XS0501195993); and

• €11,183,124 pars due 2038 (English law) issued in 2010 (ISIN: XS0501196025).

Holders of the following outstanding 2016 indenture bonds are eligible to participate in the offer:

• $4,484,000,000 6 7/8% international bonds due 2021 (ISIN: US040114GW47, USP04808AA23);

• $3.25 billion 5 5/8% international bonds due 2022 (ISIN: US040114HK99, USP04808AL87);

• $1.75 billion 4 5/8% international bonds due 2023 (ISIN: US040114HP86);

• €1.25 billion 3 7/8% international bonds due 2022 (ISIN: XS1503160225);

• €1 billion 3 3/8% international bonds due 2023 (ISIN: XS1715303340);

• CHF 400 million 3 3/8% international bonds due 2020 (ISIN: CH0361824458);

• $6,454,850,000 7½% international bonds due 2026 (ISIN: US040114GX20, USP04808AC88, US040114GS35);

• $3.75 billion 6 7/8% international bonds due 2027 (ISIN: US040114HL72, USP04808AM60);

• $4.25 billion 5 7/8% international bonds due 2028 (ISIN: US040114HQ69, US040114HF05);

• $1 billion 6 5/8% international bonds due 2028 (ISIN: USP04808AJ32, US040114HG87);

• $1,727,000,000 7 1/8% international bonds due 2036 (ISIN: USP04808AK05, US040114HE30);

• €1.25 billion 5% international bonds due 2027 (ISIN: XS1503160498);

• €1 billion 5¼% international bonds due 2028 (ISIN: XS1715303779);

• $2,617,685,000 7 5/8% international bonds due 2046 (ISIN: US040114GY03, USP04808AE45, US040114GU80);

• $3 billion 6 7/8% international bonds due 2048 (ISIN: US040114HR43, USP04808AN44);

• $2,689,277,000 7 1/8% international bonds due 2117 (ISIN: US040114HM55, US040114HN39); and

• €750 million 6¼% international bonds due 2047 (ISIN: XS1715535123).

The dollar bonds due 2021 through 2023, the euro bonds due 2022 and 2023 and the Swiss franc bonds due 2020 have an acceptance priority level of 1; the dollar bonds due 2026 through 2036 and the euro bonds due 2027 through 2028 have an acceptance priority level of 2; and the dollar bonds due 2046 through 2117 and the euro bonds due 2047 have an acceptance priority level of 3.

New bonds

Argentina is offering to issue the following bonds in exchange for its existing bonds:

• Dollar amortizing step-up bonds due 2030, up to a maximum amount of $11.4 billion;

• Euro-denominated amortizing step-up bonds due 2030, up to a maximum of €3.2 billion;

• Dollar amortizing step-up bonds due 2036, up to a maximum of $20.7 billion;

• Euro-denominated amortizing step-up bonds due 2036, up to a maximum of €2.7 billion;

• Dollar-denominated amortizing step-up bonds due 2039;

• Euro-denominated amortizing step-up bonds due 2039;

• Dollar-denominated amortizing step-up bonds due 2043;

• Euro-denominated amortizing step-up bonds due 2043;

• Dollar amortizing step-up bonds due 2047; and

• Euro-denominated amortizing step-up bonds due 2047.

Holders of 2016 indenture bonds maturing after 2023 who elect to exchange their existing bonds for new bonds that are subject to a cap may instead receive, in whole or in part, new bonds of a different series according to a waterfall procedure.

The 2005 indenture bonds will not be subject to the acceptance priority procedures.

Exchange considerations

For the 2005 indenture bonds, the exchange consideration per $100 or €100 principal amount is as follows:

• For the dollar discount bonds, $140.20380 of new dollar 2039 bonds, $140.20380 of new dollar 2043 bonds or $133.19361 of new dollar 2047 bonds, at holders’ discretion;

• For the euro discount bonds, €137.61037 of new euro 2039 bonds, €137.61037 of new euro 2043 bonds or €130.72985 of new euro 2047 bonds, at holders’ discretion;

• For the dollar par bonds, $100 of new dollar 2043 bonds or $95 of new dollar 2047 bonds, at holders’ discretion; and

• For the euro par bonds, €100 of new euro 2043 bonds or €95 of new euro 2047 bonds, at holders’ discretion.

For the 2016 indenture bonds, the exchange consideration per $100, €100 or CHF 100 principal amount is as follows:

• For the dollar bonds due 2021 through 2023, $88 of new dollar 2030 bonds, $95 of new dollar 2036 bonds or $95 of new dollar 2047 bond, at holders’ discretion;

• For the euro bonds due 2022 and 2023, €82 of new euro 2030 bonds, €95 of new euro 2036 bonds or €95 of new euro 2047 bonds, at holders’ discretion;

• For the Swiss franc bonds due 2020, €77.96159 of new euro 2030 bonds, €90.32135 of new euro 2036 bonds or €90.32135 of new euro 2047 bonds, at holders’ discretion;

• For the dollar bonds due 2026 through 2036, $88 of new dollar 2030 bonds, $95 of new dollar 2036 bonds or $95 of new dollar 2047 bonds, at holders’ discretion, subject to acceptance priority procedures;

• For the euro bonds due 2027 through 2028, €82 of new euro 2030 bonds, €95 of new euro 2036 bonds or €95 of new euro 2047 bonds, at holders’ discretion, subject to acceptance priority procedures;

• For the dollar bonds due 2046 through 2117, $95 of new dollar 2036 bonds or $95 of new dollar 2047 bonds, at holders’ discretion, subject to acceptance priority procedures; and

• For the euro bonds due 2047, €95 of new euro 2036 bonds or €95 of new euro 2047 bonds, at holders’ discretion, subject to acceptance priority procedures.

Consents

According to the press release, by tendering their bonds, holders will also be consenting to authorize and instruct the trustee of the existing bonds to modify any bonds of their series that remain outstanding after giving effect to the exchange offers by substituting them for new bonds.

The modification and substitution will only become effective if the required consents are obtained.

The proposed changes to the 2005 indenture bonds require consents from holders of 85% of the aggregate outstanding principal amount of the 2005 bonds taken as a whole and at least 66 2/3% of the outstanding principal amount of each series of 2005 bonds taken individually.

The proposed changes to the 2016 indenture bonds require consents from holders of 66 2/3% of the aggregate outstanding principal amount of the 2016 bonds taken as a whole and at least 50% of the outstanding principal amount of each series of 2016 bonds taken individually.

In addition, the republic said that if it re-designates 2005 indenture bonds that will be affected by the proposed modifications by excluding one or more series of the initially designated series, the effectiveness of the proposed changes with respect to any excluded series is conditioned on the receipt of consents from holders of at least 75% of the aggregate principal amount of that excluded series.

Similarly, if the issuer re-designates 2016 indenture bonds that will be affected by the proposed modifications by excluding one or more series of the initially designated series, the effectiveness of the proposed changes with respect to any excluded series is conditioned on the receipt of consents from holders of more than 75% of the aggregate principal amount of that excluded series.

According to the prospectus supplement, after completion of the exchange offer and related consent solicitation, the republic may propose one or more modifications that are “uniformly applicable” and would affect one or more series of new bonds and one or more series of 2016 indenture bonds that are not successfully amended with the exchange offer.

Under the terms of the 2016 indenture, if the republic proposes changes on that basis, holders of more than 75% of the aggregate principal amount of any series of new bonds and any series of 2016 bonds affected by the proposed changes, taken in the aggregate, may approve the subsequent amendments.

BofA Securities, Inc. (888 292-0070 or 646 855-8988) and HSBC Securities (USA) Inc. (888 HSBC-4LM or 212 525-5552) are dealer managers for the offer. D.F. King (argentina@dfkingltd.com; 800 341-6292, 212 269-5550 or +44 20 7920 9700; or https://sites.dfkingltd.com/argentina) is the exchange, tabulation and information agent.

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