Statement of the Ad Hoc Committee of Province of La Rioja Bondholders
NEW YORK, April 3, 2024 /PRNewswire/ -- On February 24, 2024, the Province of La Rioja failed to make timely payment of US$26.3mm of principal and interest due under its internationally issued Green Bonds. In so doing, the Province became the only province in Argentina to default on its international debt since the restructuring period of 2020-21.
While every other province with internationally-issued debt has made principal amortization payments and serviced its debt promptly, La Rioja stands out for its failure to respect its contractual obligations. This failure is particularly egregious in light of the fact that the proceeds of the Green Bonds were used to construct a series of wind parks, one of which was subsequently sold for US$171mm to Pampa Energia S.A. It is self-evident the Province indeed had the means to service its debt but chose not to.
Following its default, the Province publicly commented it would pay the interest (but not the principal) due on February 24 as a "sign of good faith". Whilst good faith implies fulfilling contractual obligations in full (particularly in a case where bondholders' money has generated a valuable return for the Province), to date bondholders have only received partial payment of the interest due. Furthermore, the Province has failed to engage in any manner with bondholders since its default and has provided no response to a proposal for remedying the default provided by the Ad Hoc Group (the "AHG").
As a consequence, the AHG, via its counsel Quinn Emanuel Urquhart & Sullivan, LLP has sent today a reservation of rights letter to the Province. The letter called on the Province to pay the balance of amounts that the Province was obliged to pay on February 24 within 14 days. The AHG has reserved all of its rights, including to declare the entire principal amount of the Green Bonds immediately due and payable or take other actions, should the Province continue its current stance.
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SOURCE Ad Hoc Committee of Province of La Rioja Bondholders
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