CNV Defines Procedure for Debt Restructurings

On October 7, 2020, the Argentine Securities and Exchange Commission (the “CNV” after its acronym in Spanish) issued a new resolution, General Resolution No. 861, which adds a new section, Section V, to Chapter IV of Title IV on Refinancing Debts by swaps and/or subscriptions in kind. This was the result of the Participatory Elaboration of Regulations procedure established by General Resolution No. 849 on September 23, 2020.

In its latest resolution, the CNV established that issuers can refinance debt by offering to swap or subscribe negotiable bonds. In both cases, debt can be refinanced by way of swap or subscription of outstanding negotiable bonds placed privately and/or with pre-existing credits against them, to the extent that:

 

• the new issuance is subscribed by creditors whose private negotiable bonds and/or pre-existing credits represent less than 30% of the total amount to be placed;

 

• the remaining percentage is subscribed in cash or in kind with negotiable bonds originally placed by public offering and listed on CNV-authorized markets.

 

The following requirements must also be met:

 

• The debts being refinanced should be reported in the company’s latest financial statement published on the Financial Information Highway (the “AIF” after its acronym in Spanish, which is on the CNV’s website).

 

• The offer must be directed to all holders of preexisting credits against the company, or to all those in the same category.

 

• Once placed, the private negotiable bonds and/or the credits received by virtue of the swap must be cancelled.

 

• The documents that make up the offer must include a complete description of the procedure to prove ownership of the private negotiable bonds and/or debts being refinanced.

 

• In the event of oversubscription, the allocation must be made on a pro-rata basis and grounded on the amounts of the private negotiable bonds/debts being refinanced.

 

In the case of refinancing or restructuring through an out-of-court restructuring agreement or an insolvency proceeding, if the negotiable bonds to be refinanced or restructured had been placed by public offering in compliance with the CNV Regulations, then the new negotiable bonds offered in the swap will be deemed as placed by public offering. In the case of swaps of new negotiable bonds with private securities or without a public offer or integration in kind, the public offer requirement will be deemed to have been met if the conditions set out in this regulation are satisfied.