Argentina’s Cordoba sweetens consent solicitation for three series

By Wendy Van Sickle

Columbus, Ohio, Dec. 14 – The province of Cordoba in Argentina amended its consent solicitation regarding three series of notes to improve its offer, according to a press release issued Monday.

Cordoba also extended the consent bid to 5 p.m. ET on Dec. 28 from 5 p.m. ET on Dec. 14.

The terms and conditions of the consent solicitation will be amended to:

• Increase the interest rate payable and include an additional step-up rate period in connection with the proposed modifications to each series, as well as change the amortization schedule and the maturity date for the 2026 notes;

• Increase the reduced interest consideration to be received by holders who do not submit consents but whose eligible notes are modified and substituted for modified notes under the consent solicitations; and

• Specify that by submitting consents, holders irrevocably waive any current default or event of default in connection with the province's failure to pay interest under the eligible notes, any interest, late interest or additional interest, expenses or costs arising from or in connection with such default or event of default.

The province has continued discussions with representatives of the investor community and their advisers and taken note of investors' varying and wide range of views on the consent solicitations, according to the release. The revisions were made in furtherance of these interactions to encourage participation by investors.

As previously reported, the solicitation covers the $709,405,000 outstanding of the 7 1/8% notes due 2021 (ISINs: US74408DAC83, USP79171AD96), the $510 million outstanding of the 7.45% notes due 2024 (ISINs: US74408DAD66, USP79171AE79) and the $450 million outstanding of the 7 1/8% notes due 2027 (ISINs: US74408DAE40, USP79171AF45).

The purpose of the consent solicitation is to achieve a sustainable debt profile for the province.

Requisite consents for all series of notes must be received in order for the proposed modifications to take effect for any single series of notes.

Modified 2021 terms

The province is seeking to modify the terms of the 2021 notes in several ways.

First, the province wants to change the interest rate to 2¾% from the settlement date to Sept. 10, 2021, stepping up to 4¼% through Sept. 10, 2022 and then to 5¾% to the maturity date. The interest rate is currently 7 1/8%.

It wants to shift the maturity date to March 10, 2026 from June 10, 2021.

Interest payments would be shifted to quarterly payments from semiannual payments starting on March 10.

Amortization would shift to quarterly installments starting Sept. 10, 2023 from a bullet amortization plan.

Modified 2024 terms

The province wishes to modify the terms on the 2024 notes.

The province wants to change the interest rate to 2¾% from the settlement date to Sept. 1, 2021, stepping up to 4¼% through Sept. 1, 2022 and then to 5¾% through the maturity date. The interest rate is currently 7.45%.

It wants to shift the maturity date to Sept. 1, 2028 from Sept. 1, 2024.

Interest payments would be shifted to quarterly payments from semiannual payments starting March 1, 2021.

Amortization would shift to quarterly installments starting Sept. 1, 2026 from a bullet amortization plan.

Modified 2027 terms

The province is asking for consent to modify the terms on the 2027 notes in a few ways.

The province wants to change the interest rate to 2¾% from the settlement date to Aug. 1, 2021, stepping up to 4¼% through Aug. 1, 2022 and then to 5¾% through the maturity date. The interest rate is currently 7 1/8%.

It wants to shift the maturity date to Feb. 1, 2030 from Aug. 1, 2027.

Interest payments would be shifted to quarterly payments from semiannual payments starting Feb. 1, 2021.

Amortization would shift to quarterly installments starting Aug. 1, 2027 from a bullet amortization plan.

Details

The settlement date will be Dec. 30.

HSBC Securities (USA) Inc. (888 HSBC-4LM, 212 525-5552) and J.P. Morgan Securities LLC (866 846-2874, 212 834-7279) are the consent solicitation agents.

D.F. King & Co., Inc. (cordoba@dfking.com, 212 269-5550, 866 342-4884, www.dfking.com/cordoba) is the information and tabulation agent.

Argentina’s Cordoba province is where the country’s second most populous city is located.

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