The Local Exchange of Sovereign Bonds in US Dollars under Argentine Law is Reopened

On November 4, 2020, Resolution No. 540/2020 of the Ministry of Economy was published in the Official Gazette, which provides for the procedure to allow eligible instruments which did not enter into the debt restructuring under Argentine law carried out on August and September of this year to be tendered. As a result of that transaction, 99.41% of the bondholders of eligible instruments denominated in US dollars or “dollar-linked” issued under Argentine law had accepted the offer.

 

Through a press release, the Ministry of Economy reported that the universe of remaining eligible instruments is of approximately USD 244.6 million, and that the holders of these instruments are mainly individuals. According to the recitals of the Resolution, since the settlement of the exchange, the Ministry has received several requests from holders that had not been able to enter the exchange previously. Its goal is to conclude the restructuring procedure of these instruments with 100% of acceptance so as to avoid having instruments —issued after 2001— whose payments are deferred.

 

It should be noted that the instruments subject to the restructuring, which is now being re-opened, were affected by the deferral of payments of principal and interest until December 31, 2020, provided by Presidential Decree No. 346/20. For more information on the deferral of payments affecting the eligible instruments, please see our article on Sovereign Debt in US Dollars Governed by Argentine Law: Deferral of Payments of Principal and Interest.

The Resolution provides that holders who were unable to enter the exchange within the prior invitation term may do so in successive acceptance terms which will be extended until July 28, 2021 in the conditions set forth therein.

 

Those who enter the exchange in this reopening will receive, as consideration, new bonds to be issued under the same conditions as the holders who entered during the late acceptance term of the original exchange. Please see our article on Local Exchange: Argentina Launched the Exchange of Sovereign Bonds in US dollars Governed by Argentine Law for more details on the universe of eligible bonds and the terms and conditions of the exchange offer.

 

Holders who enter the exchange will collect interest accrued only until April 6 (at which time Presidential Decree No. 346/20 entered into force, providing for the deferral of payments under the eligible bonds), in accordance with the provisions of Section 3 of Law No. 27,556. The Resolution provides that the new instruments accrue interest from September 4, 2020. Consequently, the holders who enter the exchange will receive the accrued and unpaid coupon in the same terms provided in the original exchange, that is, through the delivery of “Argentina Bonds in U.S. Dollars at 1% 2029” (USD BOND 2029 at 1% L.A., after its acronym in Spanish under Argentine Law) for holders who tender for new instruments denominated in US dollars, or additional instruments in Argentine Pesos for holders who tender for new instruments denominated in Argentine Pesos.

 

The Resolution provides the details of the exchange procedure and the timeline of nine successive acceptance terms and appoints Caja de Valores S.A. as the exchange agent. For more information on the procedure and details of the exchange reopening, please see Annex I of Resolution No. 540/2020 of the Ministry of Economy (in Spanish). The chart below details the relevant dates of the acceptance terms, data processing and the settlement of the new instruments included in Annex I.

 

The revocation right is limited: the Resolution provides that tender orders to accept the exchange offer will be irrevocable and cannot be withdrawn unless Argentina amends the maturity, the principal amount or the interest rate of the new instruments, the exchange ratio or the method or scope of the limitation on the issuance of new instruments.

 

The Ministry of Economy has reported that the Secretariat of Finance will actively work with all the actors of the local capital markets to identify and facilitate access to the exchange of the remaining holders, in order to complete the restructuring of the whole universe of instruments.

 

 

Relevant Dates: Acceptance Terms, Data Processing and Settlement

	Acceptance Terms
	Starting Date of Acceptance Term (A)	Due date of Acceptance Term (B)	Processing Dates of the Exchange Agent’s Data and Information for each Acceptance Term (C)	Date of Delivery of the New Instruments to the Exchange Agent for Settlement (D)			Settlement Date of each Acceptance Term (E)
	From the publication date of the Resolution that approves this procedure	Wednesday, November 25, 2020	Thursday, November 26, 2020	Friday, November 27, 2020			Monday, November 30, 2020
	Thursday, November 26, 2020	Wednesday, December 9, 2020	Thursday, December 10, 2020	Friday, December 11, 2020			Monday, December 14, 2020
	Thursday, December 10, 2020	Wednesday, January 27, 2021	Thursday, January 28, 2021	Friday, January 29, 2021			Monday, February 1, 2021
	Thursday, January 28, 2021	Wednesday, February 24, 2021	Thursday, February 25, 2021	Friday, February 26, 2021			Monday, March 1, 2021
	Thursday, February 25, 2021	Wednesday, March 17, 2021	Thursday, March 18, 2021	Friday, March 19, 2021			Monday, March 22, 2021
	Thursday, March 18, 2021	Wednesday, April 28, 2021	Thursday, April 29, 2021	Friday, April 30, 2021			Monday, May 3, 2021
	Thursday, April 29, 2021	Wednesday, May 26, 2021	Thursday, May 27, 2021	Friday, May 28, 2021			Monday, May 31, 2021
	Thursday, May 27, 2021	Wednesday, June 30, 2021	Thursday, July 1, 2021	Friday, July 2, 2021			Monday, July 5, 2021
	Thursday, July 1, 2021	Wednesday, July 28, 2021	Thursday, July 29, 2021	Friday, July 30, 2021			Monday, August 2, 2021