The Province of Jujuy Reaches Agreement in Principle with Bond Holders Ad Hoc Group on Proposed Amendments to the Terms of the Province's 8.625% Notes due 2022
JUJUY, Argentina, March 1, 2021 /PRNewswire/ -- The Province of Jujuy (the "Province") announced today that it has reached an agreement in principle with an ad hoc group of bondholders (the "Ad Hoc Group") represented by VR Advisory Services Ltd. ("VR Advisory"), with respect to certain proposed amendments (the "Proposed Amendments") to the terms of the Province's U.S.$210 million aggregate principal amount of 8.625% Notes due 2022 (the "Notes"). The Proposed Amendments are set out in Table A below.
The Ad Hoc Group has aggregate holdings of Notes representing over 50% of the Notes outstanding. The agreement in principle contemplates that (i) the Province will formally launch a consent solicitation directed to eligible holders of Notes (the "Consent Solicitation") to obtain the requisite consents under the indenture governing the Notes to effect the Proposed Amendments; and (ii) the Ad Hoc Group will support the Province's proposal to amend the Notes by submitting its consent to the Proposed Amendments.
The Proposed Amendments are the product of constructive negotiations between the Province and the Ad Hoc Group and will provide the Province with appropriate debt relief in the form of coupon reductions and maturity re-profiling to assist the Province in navigating the challenges of the Covid-19 pandemic.
The Province expects to formally launch the Consent Solicitation as soon as practicable after obtaining certain governmental approvals and finalizing customary documentation. Under the Indenture governing the Notes, the Proposed Amendments require the consents from eligible holders representing 75% or more of the outstanding Notes. If the Consent Solicitation is successfully consummated, the terms of the amended Notes are expected to provide the Province with significant debt service relief in the form of coupon reductions and maturity reprofiling.
The Province has engaged BCP Securities, LLC and Santander Investment Securities Inc. to act as solicitation agents and Global Bondholder Services Corporation to act as information and tabulation agent in the Consent Solicitation.
Table A
AMENDMENT OF INTERNATIONAL BONDS OF THE PROVINCE OF JUJUY
TERMS OF AMENDMENT
Transaction |
If the requisite consents to the Proposed Amendments from eligible holders of the Notes are obtained, the Province and the Trustee will execute a supplemental indenture and the Notes will be amended such that the Notes will have the terms set out in this term sheet (the "Amended Notes") as of the settlement date for the Transaction (the "Settlement Date").
The completion of the transaction is subject, among other things, to execution of definitive documentation and satisfaction of customary closing conditions. |
Terms of the Notes |
The Amended Notes will bear interest from the Settlement Date and shall have the following terms:
• Final maturity: March 20, 2027.
• 5.25% per annum from the Settlement Date until September 20, 2021, with the first coupon payable on September 20, 2021;
• 5.75% per annum from September 20, 2021 until March 20, 2022;
• 8.375% per annum from March 20, 2022 until final maturity.
• Interest on the Amended Notes shall be payable in cash semi-annually in arrears on March 20 and September 20 of each year until the final maturity. |
Treatment of Accrued Interest |
60% of all accrued and unpaid interest outstanding under the Notes during the period from the last interest payment date on September 20, 2020 through, but not including, the Settlement Date, will be paid in cash on the Settlement Date and the principal amount of the Amended Notes shall be increased by a principal amount equivalent to the remaining 40% of such accrued and unpaid interest during such period. The accrued and unpaid interest on all outstanding Notes (split between cash and PIK portions as set out above) shall constitute consent consideration that shall be distributed pro rata only to the consenting holders of the Notes. The non-consenting holders of the Notes shall not be entitled to any consideration with respect to the accrued and unpaid interest. |
Legal Documentation |
To be mutually agreed by the parties. The amendments to the existing indenture shall include improvements to enforceability of the holders' rights under the Notes. |
Fees |
The Province will pay customary fees and costs of the Ad Hoc Group on the Settlement Date. The one-off payment on account of such fees and costs shall be made to such accounts as VR Advisory (acting on behalf of the Ad Hoc Group) may specify and shall be deducted from the cash portion of the accrued interest payable to consenting holders of the Amended Notes on the Settlement Date |
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This announcement is for informational purposes only and is not an invitation or a solicitation of consents or offer to sell to or a solicitation of offers to buy any securities from any holders of Notes. The Consent Solicitation will be made pursuant to the Consent Solicitation Statement. Before making a decision with respect to their Notes, eligible holders of Notes are urged to review the Consent Solicitation Statement that may be issued by the Province and evaluate the risks associated with the Consent Solicitation and the Proposed Amendments to the Notes.
NONE OF THE PROVINCE, ITS ADVISORS, THE TRUSTEE, THE SOLICITATION AGENTS OR THE INFORMATION AND TABULATION AGENT NOR ANY OF THEIR RESPECTIVE DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS OR REPRESENTATIVES MAKES ANY RECOMMENDATION AS TO WHETHER ELIGIBLE HOLDERS SHOULD PARTICIPATE IN ANY CONSENT SOLICITATION THAT MAY BE ANNOUNCED BY THE PROVINCE.
Neither the consent solicitation nor the amended Notes will be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law and the amended Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
Forward-Looking Statements
This announcement contains forward-looking statements. Forward-looking statements are information of a non-historical nature or which relate to future events and are subject to risks and uncertainties. No assurance can be given that the transactions described herein will be consummated or as to the ultimate terms of any such transactions. The Province undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.
SOURCE Province of Jujuy
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