Province of Buenos Aires sees 94% participation rate in exchange offer

By Reshmi Basu

New York, Jan. 17 - The Province of Buenos Aires announced allocations for its exchange offer, which saw a participation of 94%, according to a market source.

Holders were given three options:

• Holders will receive new long-term par bonds due 2035 in exchange for the entire amount tendered.

The province will issue $468 million in dollar-denominated long-term par bonds due 2036 and €497 million euro-denominated bonds due 2035;

• The province will issue $64 million in dollar-denominated medium-term par bonds due 2020 and €572 million in euro-denominated bonds due 2020.

Since demand for the bonds was greater than the announced $750 million, holders who tendered before the early tender deadline will receive the new bonds for the first $50,000 tendered and for 70.33% of the remainder. Holders who tendered after the early tender deadline will get new bonds for $50,000 tendered and will be prorated into the long-term par option.

• The province will issue $334 million of dollar-denominated discount bonds due 2017 and €139 million of euro-denominated bonds.

Since demand was greater than $500 million, holders who tendered prior to the early tender deadline will get new discount bonds for the first $50,000 of the amount exchanged and for 67.31% of the remainder. Holders who tendered after the early tender deadline will only receive discount bonds for the first $50,000 and will be prorated into the long-term par option.

The new bonds are being offered in exchange for up to $3.1 billion of defaulted bonds.

The exchange bonds are due in 2002 and 2007 and carry around 12% rates. The longer-term bonds bear a lower rate.

The new bonds will be offered at 40 cents per dollar of the old ones.

Citigroup is managing the exchange.

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