Argentine Government Announces Restructuring of Argentina’s Short-term Financial Indebtedness

On August 29, 2019 Decree No. 596/2019 (the “Decree”) was published in the Official Gazette of the Republic of Argentina,  deferring the maturities of certain short-term government debt, by means of an immediate and staggered deferral of their maturity, without affecting the currency of denomination, principal or interest under the original terms of the issuance.

The recitals of the Decree note that “(…) it is necessary to promote a voluntary modification of the profile of maturities of financial obligations under medium and long-term sovereign bonds, under both local and foreign law (…)” for which the Argentine Congress will eventually be given intervention.

Payments under short-term bonds will be serviced as follows:

1. 15% of all amounts due will be paid upon maturity under the original terms and conditions of each bond;

2. within 90 calendar days of the payment date mentioned in point (1) above, 25% of all amounts due upon maturity, plus the accrued interest on the outstanding balance of such amount, net of the payments made; and

3. within 180 calendar days of the first payment, the remaining outstanding balance.

In the case of the Capitalizable Treasury Notes in Pesos (Letras del Tesoro Capitalizables en Pesos or “Lecaps”) listed below, which mature as of January 1, 2020, the outstanding balance after the payment listed in point (1) above will be serviced in entirety within 90 calendar days of such initial payment.

The deferral of payments under the Decree does not apply to the short-term government bonds listed below, whose registered holders with the Caja de Valores as of July 31, 2019 are natural persons who still hold the bonds upon maturity.

The deferral of payments under the Decree does not interrupt the accrual of interest as established in the original terms and conditions of the bonds. In the case of variable interest rates, the methodology established in the original terms and conditions of the bonds applies.

Below is a table showing the short-term government bonds subject to the provisions of the Decree:

See table