The Province of Córdoba Reaches Agreement with Ad Hoc Bondholder Group & Announces Amendment to Consent Solicitations

CORDOBA, Argentina, Jan. 11, 2021 /PRNewswire/ -- The Province of Córdoba (the "Province") today announced its decision to improve the terms and conditions pursuant to which it is soliciting the holders of each series of the eligible notes set forth in Table A (the "Eligible Notes") other than Ineligible Holders (as defined below) ("Holders") to consent to certain modifications (the "Proposed Modifications") to their respective series of Eligible Notes, initially set forth in its consent solicitation statement dated November 6, 2020, as most recently amended and restated on January 1, 2021 (as it may be amended or supplemented from time to time, the "Consent Solicitation Statement"). Capitalized terms used herein but not defined shall have the meaning assigned to them in the Consent Solicitation Statement. In addition to the modifications set out below in Table B to this announcement, the Amendment No. 4 to Consent Solicitation Statement shall include certain other amendments to the non-financial terms of the Eligible Notes.

The Province will revise the terms and conditions of the Consent Solicitation Statement mainly to:

1. further increase the interest rate payable in connection with the Proposed Modifications to each series of Eligible Notes; smooth the amortization payments in respect of the 2025 Notes, as well as bring forward the amortization schedule and the maturity date for the amended 2027 Notes and the 2029 Notes; and
2. set forth that 60% of the Accrued Interest Consideration (as defined below) to be received by Holders who submit valid and accepted Consents pursuant to the Consent Solicitations shall be paid in cash.

Table B to this announcement sets forth a summary of the revised Proposed Modifications to each series of Eligible Notes. The Province will publish an amendment to the Consent Solicitation Statement reflecting the improvements described herein (the "Amendment No. 4 to Consent Solicitation Statement") as soon as reasonably practicable. References to the "Consent Solicitation Statement" shall refer to the consent solicitation statement as amended and restated by the Amendment No. 4 to Consent Solicitation Statement.

The terms and conditions of the Consent Solicitations will be described in full in the Consent Solicitation Statement. The Province will work with the Ad Hoc Bondholder Group to finalize the legal documentation.

The Province encourages all investors to consider the revised terms of the Consent Solicitations and join the Province in creating a sustainable path for the recovery of the Province's economy.

Extension of Expiration of Consent Solicitations

The Province has amended the expiration of the Consent Solicitations from 5:00 p.m., New York City time, on January 14 2021, to 5:00 p.m., New York City time, on January 22, 2021 (the "Expiration"). The results announcement date shall be on January 26, 2021 or as early as practicable thereafter, and the consent date, the effective date and the settlement date shall be on January 26, 2021 or as early as practicable thereafter.

Consents may be revoked at any time on or prior to the earlier of the Expiration and the date the requisite consents contemplated in the applicable indenture for such series of Eligible Notes are accepted (the "Consent Date"). The Province expects to execute both (i) the Supplemental Indentures giving effect to the Proposed Modifications with respect to all series of Eligible Notes for which the Requisite Consents are received and accepted, and (ii) the Modified Notes, promptly after the earlier of the Expiration or the Consent Date.

Holders who delivered their consents to the Proposed Modifications prior to the date of the Amendment No. 4 to Consent Solicitation Statement and do not revoke such consents prior to the earlier of the Expiration and the Consent Date shall be considered to have accepted the terms and conditions of the Consent Solicitations. References to tendering Holders in the Consent Solicitations shall include Holders who delivered (and did not revoke) their consent prior to the date of the Amendment No. 4 to Consent Solicitation Statement.

With regard to each series of Eligible Notes, it is a condition to the effectiveness of the relevant Proposed Modifications that the Province receives and accept valid Consents from Holders representing the requisite majorities provided for in the applicable indenture (the "Requisite Consents"), as described under "Terms of the Consent Solicitation—Proposed Modifications" of the Consent Solicitation Statement.

For the avoidance of doubt, the Province will only accept Consents to effect the Proposed Modifications to the extent that it receives Requisite Consents from each series of Eligible Notes to effect the Proposed Modifications to all series of Eligible Notes (the "Participation Condition"). 

Consent Consideration

The Province is offering to pay Holders of Eligible Notes who validly deliver a Consent to the Proposed Modifications at or prior to the Expiration an aggregate amount equal to 100% of the accrued and unpaid interest under the Eligible Notes for which such Consent was delivered and accepted (prior to giving effect to the Proposed Modification), for each U.S.$1,000 of principal amount of Eligible Notes, as follows (the "Accrued Interest Consideration"):

• 60% of the Accrued Interest Consideration will be paid in cash only to Eligible Holders whose Consents are validly delivered and accepted (the "Cash Consent Consideration"), provided that the Ad Hoc Bondholder Group Expenses (as defined below), if any, shall be deducted from the Cash Consent Consideration; and
• the balance of the Accrued Interest Consideration (after subtracting the Cash Consent Consideration) will be paid by the issuance and delivery of additional Modified Notes (as amended by the applicable Supplemental Indenture), which such additional Modified Notes will be added to the principal amount of the Eligible Notes as to which Consents have been validly delivered and accepted (the "Aggregated PIK"), as follows:

(a)  In the case of Consents for the 2021 Notes: an amount equal to accrued and unpaid interest from June 10, 2020 to, but excluding, the Settlement Date, capitalized into the principal amount of Modified Notes to be received at a rate of 7.125% minus the relevant portion of the Cash Consent Consideration;

(b)  In the case of Consents for the 2024 Notes: an amount equal to accrued and unpaid interest from September 1, 2020 to, but excluding, the Settlement Date, capitalized into the principal amount of Modified Notes to be received at a rate of 7.450% minus the relevant portion of the Cash Consent Consideration; and

(c)  In the case of Consents for the 2027 Notes: an amount equal to accrued and unpaid interest from August 1, 2020 to, but excluding, the Settlement Date, capitalized into the principal amount of Modified Notes to be received at a rate of 7.125% minus the relevant portion of the Cash Consent Consideration.

The Cash Consent Consideration will be payable on the Settlement Date.

Holders are deemed, by delivering their Consent, to instruct the Province to deduct from the aggregate Cash Consent Consideration, on the Settlement Date, an amount of up to U.S.$3.5 million on account of costs and expenses for legal and financial advisory services of the Ad Hoc Bondholder Group (the "Ad Hoc Bondholder Group Expenses") in connection with the Consent Solicitation. For the avoidance of doubt, the Ad Hoc Bondholder Group Expenses will be deducted on a pro rata basis from the Cash Consent Consideration payable to all Holders who deliver their Consents at or prior to the Expiration pursuant to this Consent Solicitation Statement. The payment of the Ad Hoc Bondholder Group Expenses will be delivered to such accounts as White & Case LLP, as legal counsel of the Ad Hoc Bondholder Group, will notify the Province in writing at least five days prior to the Settlement Date.

Holders who do not submit Consents will receive the Reduced Interest Consideration (as defined in the Consent Solicitation Statement) and will not be entitled to receive any cash payment for any accrued and unpaid interest for the period since the last interest payment under their Eligible Notes to, but excluding, the Settlement Date, on any Eligible Notes that are modified and substituted for Modified Notes pursuant to any Consent Solicitation.

* * * * * * * * * *

The Eligible Notes were not, and the Modified Notes will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state securities law. The Modified Notes may not be offered or sold in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

The Province has engaged HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC to act as consent solicitation agents for the Consent Solicitation. D.F. King & Co., Inc. is acting as information and tabulation agent. Any questions or requests for assistance regarding the Consent Solicitation may be directed to HSBC Securities (USA) Inc. at +1 (888) HSBC-4LM (toll free) and +1 (212) 525-5552 (collect) or J.P. Morgan Securities LLC at +1 (866) 846-2874 (toll free) and +1 (212) 834-7279 (collect).

Before you submit your Consent, you should read the Consent Solicitation Statement. Holders, or custodians for such holders, of Eligible Notes may obtain a copy of the Consent Solicitation Statement by contacting the consent solicitation agents calling any of the above numbers or by contacting D.F. King & Co., Inc. at its email address ([email protected]) or telephone number (+1 (212) 269-5550 (banks and brokers) / +1 (866) 342-4884 (all others)) or by download, following registration, via: www.dfking.com/cordoba.

Important Notice

The distribution of materials relating to the Consent Solicitation may be restricted by law in certain jurisdictions. The Consent Solicitation is void in all jurisdictions where it is prohibited. If materials relating to the Consent Solicitation come into your possession, you are required by the Province to inform yourself of and to observe all of these restrictions, including whether you are a Holder pursuant to the laws of your jurisdiction. The materials relating to the Consent Solicitation, 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. Holders should carefully review the restrictions and limitations applicable in certain jurisdictions and the manner in which the Consent Solicitation Statement will be made available in such jurisdictions, as set forth under "Transfer Restrictions" and "Jurisdictional Restrictions" of the Consent Solicitation Statement.

If a jurisdiction requires that the Consent Solicitation be made by a licensed broker or agent and a consent solicitation agent or any affiliate of a consent solicitation agent is a licensed broker or agent in that jurisdiction, the Consent Solicitation shall be deemed to be made by the consent solicitation agent or such affiliate on behalf of the Province in that jurisdiction. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction. The offering of these securities will be made only by means of the Consent Solicitation Statement.

Neither the Province, the Trustee, the Consent Solicitation Agents or the Information and Tabulation Agent has expressed any opinion as to whether the terms of the Consent Solicitation are fair.  In addition, none of the clearing systems through which you may deliver your Consent has expressed any opinion as to whether the terms of the Consent Solicitation are fair.  Neither the Province, the Trustee, the Consent Solicitation Agents or the Information and Tabulation Agent makes any recommendation that you deliver Consents or refrain from doing so pursuant to the Consent Solicitation, and no one has been authorized by the Province, the Trustee, the Consent Solicitation Agents, or the Information and Tabulation Agent to make any such recommendation.  You must make your own decision as to whether to deliver your Consent or refrain from doing so.

Forward-Looking Statements

This announcement contains certain "forward-looking" statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on current plans, estimates and projection, and therefore you should not put undue reliance on them. These statements are likely to relate to, among other things, the Province's goals, plans and projections regarding its financial position, results of operations, expenses, performance or the outcome of contingencies such as legal proceedings, which are based on current expectations that involve inherent risks and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years. The Province undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Notice to Holders

For the purposes of this announcement, "Ineligible Holder" means each beneficial owner located within a Member State of the European Economic Area or the United Kingdom (each, a "Relevant State") who is not a "qualified investor" (as defined in Regulation (EU) 2017/1129 (the "Prospectus Regulation")) or any other beneficial owner located in a jurisdiction where the Consent Solicitation is not permitted by law.  No offer of any kind is being made to Ineligible Holders.  For further details about eligible offerees and resale restrictions, see the Consent Solicitation Statement.

Notice to Holders In the United States

The Province is making this announcement in reliance on exemptions from the registration requirements of the Securities Act.  This announcement is directed only (1) to holders of Eligible Notes who are "qualified institutional buyers" as defined in Rule 144A under the Securities Act ("QIBs") and (2) outside the United States, to holders of Eligible Notes other than "U.S. persons" (as defined in Rule 902 under the Securities Act).

These exemptions apply to offers and sales of securities that do not involve a public offering. The Modified Notes have not been recommended by any U.S. or non-U.S. securities authorities, and these authorities have not determined that this announcement is accurate or complete. Any representation to the contrary is a criminal offense.

Notice to Holders In the EEA and the United Kingdom

The Modified Notes are not intended to be offered, sold, or otherwise made available to any retail investor in the European Economic Area ("EEA") or in the United Kingdom ("UK"). Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Modified Notes or otherwise making them available to retail investors in the EEA or the UK has been prepared and therefore offering or selling the Modified Notes or otherwise making them available to any retail investor in the EEA or the UK may be unlawful under the PRIIPs Regulation.

For the purposes of these provisions: the expression "retail investor" means a person who is one (or more) of the following: (A) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (B) a customer within the meaning of Directive (EU) 2016/97 (as amended, the "IDD"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II.  References to Regulations or Directives include, in relation to the UK, those Regulations or Directives as they form part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 or have been implemented in UK domestic law, as appropriate.

*******************************************************************

AMORTIZATION SCHEDULE OF THE MODIFIED NOTES

(1)           % of outstanding principal amount after giving effect to the additional Modified Notes to be issued as Aggregated PIK and Reduced Interest Consideration.

(2)           To the extent necessary, principal payments may be rounded down to the nearest whole number, with any difference being paid at maturity.

SOURCE The Province of Córdoba