The Province of La Rioja Reaches Agreement in Principle with Ad Hoc Group of Bondholders to Amend its 9.750% Notes due 2025

LA RIOJA, Argentina, Aug. 25, 2021 /PRNewswire/ -- The Province of La Rioja (the "Province") announced today that it has reached an agreement in principle with an ad hoc group of bondholders represented by VR Advisory Services Ltd and Sandglass Capital Advisors LLC (the "Ad Hoc Group") and with GoldenTree Asset Management LP ("GoldenTree" and, together with the Ad Hoc Group, the "Holders"), for the Holders to support a proposal to amend the Province's 9.750% Notes due 2025 (the "Notes"). The Ad Hoc Group and GoldenTree collectively hold approximately 63.7% of the US$300,000,000 principal amount of the Notes. The formal launch of the consent solicitation process to amend the Notes is expected to occur on or about August 31, 2021, subject to obtaining certain governmental approvals and the completion of consent solicitation documentation.  The Province cannot assure that such approvals and documents will be obtained or finalized as expected or that the consent solicitation, once formally launched, will be successful.

The consummation of the consent solicitation will be subject, among other things, to execution of definitive documentation and satisfaction of customary conditions (including a minimum participation of holders of more than 75% of the outstanding principal amount of the Notes). After giving effect to the restructuring of the Notes on the settlement date, each holder of U.S.$1,000 in principal amount of the Notes shall hold U.S.$1,000 in principal amount of amended Notes.  The terms of the Notes will be amended as set forth on Annex A.

100% of the accrued and unpaid interest through (and including) August 23, 2021 and outstanding under the Notes as of the settlement of the transaction ("PDI") will be allocated to the eligible holders that consent to the amendments, ratable to the principal amount of Notes they hold and as to which the consent is given, in the following manner: (i) 58% (minus the Transaction Expenses (as defined below)) in cash at settlement of the transaction and (ii) 42% in the form of additional Notes. Holders who do not participate or do not consent in the consent solicitation will not receive any PDI on the Notes.

Subject to the effectiveness of the amendments and settlement of the other elements of the consent solicitation on the agreed terms, the Holders have agreed to withdraw their claim seeking a judgment against the Province filed in the United States District Court for the Southern District of New York.

If the consent solicitation is successfully consummated, the terms of the amended Notes are expected to provide the Province with relief by way of reducing its debt service obligations and extending the maturity profile of the Notes.  The Province will adjust certain aspects of the documentation for the Notes to address proposals submitted by members of the creditor community that seek to strengthen the effectiveness of the contractual framework as a basis for the resolution of sovereign debt restructurings, in line with the enhancements introduced by the Republic of Argentina and other Argentine provinces following the restructuring of their own debt securities in 2020 and earlier in 2021.  Finally, a one-off payment on account of expenses incurred by the Ad Hoc Group in an amount of US$600,000 (the "Transaction Fee") will be deducted from the cash consideration to be received by the consenting holders upon settlement of the transaction and paid to the account of Quinn Emanuel Urquhart & Sullivan, LLP as will be set forth in the final documentation.

*          *          *

This announcement is for informational purposes only and is not an invitation or a solicitation of consents from any holders of Notes. The consent solicitation will be made pursuant to a 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 proposed amendments to the Notes described therein.

NONE OF THE PROVINCE, ITS ADVISORS OR AGENTS, NOR ANY OF THEIR RESPECTIVE OFFICERS, 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.

ANNEX A

SOURCE The Province of La Rioja