New Regulation for Prepaying Foreign Indebtedness

Through Communication “A” 8112 of October 3, 2024, the Argentine Central Bank (BCRA) established new requirements for accessing the foreign exchange market paying principal or interests on publicly-registered debt securities and other foreign financial indebtedness.

The most significant provisions are:

1. Prepayment for principal and interest: access to the foreign exchange market will be permitted to prepay principal and interest on debts or debt securities registered in Argentina in the context of refinancing operations; to repurchase and/or early redeem existing debt—if financed with new external funds—requiring at least a one-year grace period to pay principal, and two years of average life of the remaining principal.

2. Payment of principal and interest on foreign financial indebtedness: new debt securities delivered in exchange, repurchase, and/or early redemption transactions of current debt securities are considered as received and settled, if the nominal value—by way of participation premium, repurchase, or early redemption—does not exceed 5% exchanged or repurchased value; and a minimum of one year grace period for the payment of principal and implying a minimum extension of two years with respect to the average life.

3. Affidavit regarding holdings of liquid external assets: holdings exceeding USD 100,000 may be declared for funds deposited in foreign bank accounts from the subscription of new debt security in the last 60 days, if these funds will be used for refinancing operation, repurchase, and/or early redemption of debt securities or foreign financial debts.