The Province of Buenos Aires Provides an Update on Debt Restructuring

LA PLATA, BUENOS AIRES, Argentina, March 21, 2021 /PRNewswire/ -- Since the announcement of its invitation to holders of certain eligible bonds (the "Eligible Bonds") as set forth in the invitation memorandum dated April 24, 2020 (as amended and supplemented from time to time, the "Invitation Memorandum") to submit orders to exchange their Eligible Bonds for new bonds (the "New Bonds"), the Province of Buenos Aires (the "Province") has maintained informal discussions with various institutional holders and certain of their advisors.  These discussions have sought to identify adjustments to the Province's initial proposal that would facilitate the participation of Eligible Holders (as defined below) in the exchange while meeting the authorities' overall debt and economic policy objectives.

On March 18, 2021, GoldenTree Asset Management LP ("GoldenTree"), one of the Province's largest bondholders, entered into a non-disclosure agreement with the Province (the "NDA").  In furtherance of the NDA, the Province delivered to GoldenTree the materials attached hereto as Annex A setting forth a package that, in the authorities' view, gave investors opportunities to contribute to a successful debt restructuring while preserving the Province's debt sustainability goals. The presentation attached hereto as Annex A does not constitute an amendment to the Invitation Memorandum or the terms of the invitation set forth therein. The Invitation is currently scheduled to expire on March 26, 2021.

GoldenTree responded by putting forward conditions in terms of overall debt service and maturity that expose a material digression from terms that the Province could consider meaningful for the purpose of continuing discussions on a restricted basis.  Accordingly, the NDA has expired in accordance with its terms.

Since December 2019, the authorities of the Province have dedicated significant efforts to address the Province's outstanding debt imbalance through a debt restructuring that meaningfully contributes to stabilizing the Province's economic condition and allows the Province's economic trajectory to return to long-term growth, thus preserving value for investors.  In the meantime, the outbreak of the COVID-19 pandemic has added demands on the Province's strapped finances, and required the authorities of the Province to focus their efforts on managing the materially adverse impact of this lasting condition on the Province's population. The Province remains available to engage with investors with a view to identifying paths adequate to permit a debt restructuring that meets the Province's long-term objectives and restores value to all stakeholders by making the debt burden sustainable.

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Eligible Holders, or custodians for such holders, of Eligible Bonds may obtain a copy of the Invitation Memorandum by contacting the dealer managers by calling any one of the numbers above or D.F. King at its email address ([email protected]) or telephone number (+44 20 7920 9700 or +1 212-232-3233) or by download, following registration, via: https://sites.dfkingltd.com/PBA

Important Notice

This announcement, including the presentation attached hereto as Annex A, is not an offer of securities for sale in the United States, and none of the New Securities (as defined in the Invitation Memorandum) has been or will be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and they may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.  This press release does not constitute an offer of the New Securities for sale, or the solicitation of an offer to buy any securities, in any state or other jurisdiction in which any offer, solicitation or sale would be unlawful.  Any person considering making an investment decision relating to any securities must inform itself independently based solely on an offering memorandum to be provided to eligible investors in the future in connection with any such securities before taking any such investment decision. 

This announcement is directed only to beneficial owners of Eligible Bonds who are (A) "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act") or (B) (x) outside the United States as defined in Regulation S under the Securities Act, (y) if located within a Member State of the European Economic Area ("EEA") (each, a "Relevant State"), "qualified investors" as defined in Regulation (EU) 2017/1129 (as amended, the "Prospectus Regulation"), (z) if located within the United Kingdom ("UK"), "qualified investors" as defined in the Prospectus Regulation as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA") and (zz) if outside the EEA or the UK, is eligible to receive this offer under the laws of its jurisdiction (each an "Eligible Holder"). No offer of any kind is being made to any beneficial owner of Eligible Bonds who does not meet the above criteria or any other beneficial owner located in a jurisdiction where the Invitation is not permitted by law.

The distribution of materials relating to the Invitation may be restricted by law in certain jurisdictions. The Invitation is void in all jurisdictions where it is prohibited. If materials relating to the Invitation come into your possession, you are required by the Province to inform yourself of and to observe all of these restrictions. The materials relating to the Invitation, including this communication, do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires that the Invitation be made by a licensed broker or dealer and a dealer manager or any affiliate of a dealer manager is a licensed broker or dealer in that jurisdiction, the Invitation shall be deemed to be made by the dealer manager or such affiliate on behalf of the Province in that jurisdiction.

Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are forward-looking statements. These statements are based on expectations and assumptions on the date of this press release and are subject to numerous risks and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. Risks and uncertainties include, but are not limited to, market conditions, and factors over which the Province has no control. The Province assumes no obligation to update these forward-looking statements, and does not intend to do so, unless otherwise required by law.

Notice to Investors in the European Economic Area

The New Securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in a Relevant State. For these purposes, a "retail investor" means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the New Securities or otherwise making them available to retail investors in a Relevant State has been prepared and therefore offering or selling the New Securities or otherwise making them available to any retail investor in a Relevant State may be unlawful under the PRIIPs Regulation.

Notice to Investors in the United Kingdom

The New Securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the UK. For these purposes, a retail investor means a person who is one (or more) of the following: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA; (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement the Insurance Distribution Directive, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of the Prospectus Regulation as it forms part of domestic law by virtue of the EUWA. Consequently no key information document required by the PRIIPs Regulation as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the New Securities or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the New Securities or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

For the purposes of section 21 of the Financial Services and Markets Act 2000, to the extent that this announcement constitutes an invitation or inducement to engage in investment activity, such communication falls within Article 34 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), being a non-real time communication communicated by and relating only to controlled investments issued, or to be issued, by the Province.

Other than with respect to distributions by the Province, this announcement is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Promotion Order, (ii) are persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which the announcement relates is available only to relevant persons and will be engaged in only with relevant persons.

ANNEX A

Illustrative Terms

Key Considerations

• Illustrative settlement date: 31-Mar-21
• Allocation for consenters: aggregate principal to be allocated 50%/50% between 2031 and 2039 New Bonds
• PDI recognition for consenters: capitalized into the New Bonds (proportional to allocation) and recognized until 31-Mar-21

Important Notice

This document, and the information and estimates expressed herein, have been prepared by the Province and its advisors to provide recipients with general information and estimates made as of the date hereof, and are subject to change without notice and the Province and its advisors undertake no obligation to notify such changes or update the contents hereof. This document and its contents do not constitute an offer, invitation or solicitation to purchase or subscribe for securities or other instruments, or a recommendation to make or change any investment decision. Neither this document nor its contents constitute or should be considered a contract, commitment or decision of any kind.

Neither the Province nor its advisors shall, under any circumstances, be held responsible for the outcome of decisions made by recipients based on the information presented herein.

Recipients shall maintain the information provided in written and/or oral form in this document and/or the meetings held with the Province and its advisors strictly confidential.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933. This document does not contain or constitute an offer to sell or the solicitation of an offer to exchange or deliver consents to purchase or subscribe for securities in any jurisdiction.

No recipient of this document may distribute or reproduce this document in whole or in part without the prior written consent of the Province or use it for any other purpose. Failure to comply with these restrictions may be considered a breach of applicable laws, including those of the Argentine Republic and of the jurisdiction in which such distribution or reproduction occurs.

SOURCE The Province of Buenos Aires