Ad Hoc Group of Entre Rios Bondholders Reaches Agreement in Principle with the Province on Restructuring Terms
NEW YORK, Feb. 12, 2021 /PRNewswire/ -- The Ad Hoc Bondholder Group (the "Ad Hoc Group") of the Province of Entre Rios (the "Province") confirms it has reached an agreement in principle with the Province on the terms of a proposed debt restructuring relating to the Province's U.S. $500,000,000 8.750% Notes due 2025 (the "Notes"). The Ad Hoc Group intends to support a consent solicitation expected to be launched shortly by the Province to effect, amongst other things, certain amendments to the terms of the Notes (the "Amendments") reflecting such agreed terms. The agreed terms are set out in Table A below.
Subject to the effectiveness of the Amendments and settlement of the other elements of the consent solicitation on the agreed terms, the members of the Ad Hoc Group have agreed to withdraw (or cause to be withdrawn) their claim seeking a judgment against the Province filed on January 4, 2021 in the United States District Court for the Southern District of New York.
The Amendments are the product of constructive negotiations between the Province and its bondholders and will provide the Province with appropriate debt relief in the form of coupon reductions and maturity re-profiling to assist the Province in navigating the challenges of the Covid-19 pandemic.
The Ad Hoc Group, which collectively holds in excess of 58% of the Notes, 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.
Table A
RESTRUCTURING OF INTERNATIONAL BONDS OF
THE PROVINCE OF ENTRE RIOS
TERM SHEET
Transaction |
Following approval by the requisite majority of the Holders of the Existing Notes in accordance with the terms of the indenture, the Existing Notes will either be exchanged for new notes (the "New Notes") having the terms set out in this term sheet or the Existing Notes will be amended such that the Existing Notes will have the terms set out in this term sheet. For each U.S.$1,000 in principal amount of the Existing Notes held by the Holder as of the settlement date for the Transaction (the "Settlement Date"), such Holder shall receive U.S.$1,000 in principal amount of New Notes (subject to further increase of the principal amount of the New Notes as a result of the payment-in-kind of a portion of the accrued and unpaid interest as described below).
The completion of the Transaction is subject, among other things, to execution of definitive documentation and satisfaction of customary closing conditions, in each case in a form to be mutually agreed.
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Terms of the New Notes |
The New Notes will be issued on, and bear interest from, the Settlement Date and shall have the following terms:
• Final maturity: 8 August 2028. • Amortise in twelve semi-annual installments commencing on 8 February 2023 as follows:
8 February 2023 5% 8 August 2023 5% 8 February 2024 9% 8 August 2024 9% 8 February 2025 9% 8 August 2025 9% 8 February 2026 9% 8 August 2026 9% 8 February 2027 9% 8 August 2027 9% 8 February 2028 9% 8 August 2028 9%
• Bear interest at the rate of: • 5.00% per annum from 8 February 2021 until 8 August 2022, with the first coupon payable on 8 August 2021; • Interest on the New Notes shall be payable in cash semi-annually in arrears on 8 February and 8 August of each year until the final maturity.
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Treatment of Accrued Interest |
60% of all accrued and unpaid interest outstanding under the Existing Notes that was payable on 8 August 2020 and 8 February 2021 (i.e., for the period from 8 February 2020 through 8 February 2021) will be paid in cash on the Settlement Date and the principal amount of the New Notes shall be increased by the remaining 40%. The cash portion shall be allocated pro rata to the consenting Holders. Non-consenting Holders shall receive the entire accrued and unpaid interest in the form of PIK. The New Notes shall be deemed to accrue interest at the rates set out above from 8 February 2021.
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Legal Documentation |
To be mutually agreed by the parties. The amendments to the existing indenture shall include improvements to enforceability of the Holders' rights under the Notes.
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Fees |
The Province of Entre Rios will pay all reasonable fees and costs of the Group on the Settlement Date. The one-off payment on account of such fees and costs shall be made to such accounts as the Group may specify and shall be deducted from the cash portion of the accrued interest payable to Holders on the Settlement Date.
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Media Contact: Erin Hershkowitz, [email protected]
SOURCE White & Case LLP
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