Members of Bondholder Group Sue Province of Buenos Aires in U.S. District Court in New York
NEW YORK, March 23, 2021 /PRNewswire/ -- Members of the Steering Committee of the Ad Hoc Group of Buenos Aires Bondholders (the "Group"), who are beneficial owners under eleven series of outstanding Notes with an aggregate principal amount of more than $7.1 billion (the "Notes") issued by the Province of Buenos Aires (the "Province"), filed claims today in the United States District Court for the Southern District of New York seeking judgment against the Province in respect of its continuing default on scheduled payments of interest and/or principal under each of such series of Notes.
The Province ceased making scheduled payments on the Notes in April 2020 and has since defaulted on its payment obligations under all series of Notes. Since April, the Province has made virtually no effort to engage in good faith negotiations with the Group to find a mutually agreeable and consensual solution, despite several attempts at engagement by the Group and its advisors. In lieu of engagement, Provincial officials have repeatedly elected to extend the acceptance deadline for a failed restructuring offer that is disconnected from the reality of the Province's actual financial capacity and has accordingly never attracted support from its bondholders.
Recently, the Province held restricted discussions with one of its largest bondholders, GoldenTree Asset Management, which is also a member of the Group. Notably, the Provincial leadership declined GoldenTree's request that the full Steering Committee be invited to participate in the talks. In any event, the modified terms of the restructuring that the Province discussed with GoldenTree, and which were made public on 21 March, have been rejected by both GoldenTree and the Steering Committee and are far removed from terms that the Province's international bondholders would find acceptable.
Actions speak louder than words, and it is regrettable that the Provincial leadership has chosen to follow a course of confrontation and default with its international bondholders rather than one of negotiation and compromise. In the long run, the true cost of the Province's unconstructive approach will be borne by its population and businesses. With less access to capital and a hostile investment environment, job creation, business activity and economic growth will continue to suffer.
In recent months, eight Argentine provinces have resolved near term debt related challenges created by the pandemic through good faith dialogue with their respective international bondholders—a sharp contrast to the approach of the Provincial authorities. This unfortunate situation has left the members of the Group, who owe fiduciary duties to their own investors, no choice but to exercise the contractual remedies available to them through the New York courts.
The Group's support is clearly required for a successful restructuring outcome in the Province and the individual institutions which have today initiated litigation stand united in insisting that the Province must agree to engage in meaningful and good faith negotiations with the Group if it truly seeks to reach a consensual solution.
The members of the Group who have today filed claims remain open to considering proposals from the Province that fairly reflect the reality of the Province's financial and economic position. In the meantime, they intend to vigorously pursue the legal proceedings that they have initiated today, and reserve in full their right to exercise additional available remedies at any time.
The members of the Steering Committee are represented by White & Case LLP. Please send any press inquiries regarding the litigation or Steering Committee to Infomedia ([email protected]).
SOURCE White & Case LLP
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