Statement of the Steering Committee of the Ad Hoc Group of Bondholders of the Province of Buenos Aires
NEW YORK and LONDON, Nov. 2, 2020 /PRNewswire/ -- In light of the Province of Buenos Aires' ongoing default on its external debt obligations, and the lack of constructive engagement from the Province, the Steering Committee of the Ad Hoc Group of Bondholders ("the Group"), which comprises more than 40 institutions holding in excess of 49% of the Province's external bonded debt, has retained White & Case LLP and Ayres Investment Management LLP to assist in evaluating all available options to progress the restructuring.
In December 2019, a number of institutional holders of bonds issued by the Province formed the ad hoc group to facilitate a dialogue with provincial authorities. From the outset, the Group's objective was to find a constructive and consensual solution that addresses the liquidity challenges of the Province in a manner that could garner the support of international bondholders. After meeting with provincial officials in March and performing a careful analysis of the Province's economic data and circumstances, the Steering Committee shared a proposal that would provide approximately $3.3 billion in debt service relief, as well as a three-year maturity extension. Rather than engaging with the Steering Committee, in April the Province rejected the invitation to enter into negotiations and launched a unilateral exchange offer that was resoundingly rejected by bondholders.
The Province has now extended the acceptance deadline for its unilateral offer multiple times, despite the consistent message from bondholders that the offer does not accurately reflect the Province's repayment capacity and is therefore not the basis for a consensual solution. There is no basis for thinking that further extensions of this failed offer can lead to a positive outcome.
Although the Province has regrettably shown little interest in engaging substantively with its bondholders over the past year, the Steering Committee remains ready and willing to engage in good faith negotiations to find a constructive solution appropriate to the Province's specific fiscal situation. Such a solution would in turn make possible a resumption of much-needed investment and access to international capital markets. While the Steering Committee remains hopeful that a consensual resolution can be achieved, should the Province maintain its present counterproductive and confrontational course, the Steering Committee and its advisors are prepared to evaluate all available options.
Holders of the Province’s international bonds who wish to learn more about the Group and its objectives are encouraged to contact:
White & Case LLP
Brian Pfeiffer ( [email protected] ) or Ian Clark ( [email protected] )
SOURCE White & Case
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