| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers Tenders > Headlines for 2020 > News item |
Neuquen amends consent solicitations for 7½% Tideneu notes
By Taylor Fox
New York, Nov. 17 The Province of Neuquen announced that it further amended the terms of its consent solicitation relating to its outstanding $366 million of 7½% series 1 notes due 2025 (ISINs: US64126BAC46, USP71695AC75), referred to as the Tideneu notes, according to an announcement.
The province modified the consent solicitation relating to the Tideneu securities as follows:
To provide for the payment of interest for the last coupon period ended Oct. 27 and current coupon period ending Nov. 27 on Tideneu notes for which consents were delivered and accepted. Subject to the deduction of some expenses, this consent consideration will be paid as follows: 70.8% of the interest accrued during the last coupon period will be paid by the issuance and delivery of additional Tideneu notes, 29.2% of the interest accrued during the last coupon period will be paid in cash and 100% of the interest accrued during the current coupon period will be paid by the issuance and delivery of additional Tideneu notes;
To increase the interest rates and modify the principal payment amortization schedule on the outstanding securities proposed in the original consent solicitation statement;
To amend the cross payment default and cross acceleration to exclude any default or event of default under the provinces series 1, tranches 1 and 2, 8.625% secured notes due 2028;
To irrevocably waive any default or event of default in connection with the provinces failure to pay interest of the notes due on Oct. 27 and any interest, late interest or additional interest, expenses or costs arising from or in connection with such default or event of default;
To irrevocably waive the right to receive 100% of the interest accrued and unpaid under the notes during the last coupon period and during the current coupon period; and
To irrevocably waive the right to receive interest on the scheduled Oct. 27 interest payment date.
As previously reported, the offer comprises in addition to the Tideneu notes, the $327,770,480 outstanding 8 5/8% series 1 secured notes due 2028 (ISINs: US64126BAC46, USP71695AC75), referred to as the Ticade securities. The amount was initially $338,231,240.
The province is also seeking the consent of the lenders under its credit agreement dated Dec. 1, 2015 to amend some terms of the credit agreement with Credit Suisse AG, London Branch as administration agent, similar to the relief sought through the amendments to the Ticade securities.
As reported, the consent solicitation was recently extended to 5 p.m. ET on Nov. 24 from 5 p.m. ET on Nov. 13.
The province continues to engage in discussions with external creditors to restore debt to sustainable levels, in light of current conditions and the expected long-lasting effects of the Covid-19 pandemic on both Argentina and the province.
The province also received support from an ad hoc committee of secured bondholders of Ticade securities including Amundi Asset Management, Contrarian Capital Management, LLC and Franklin Templeton Investment Management Ltd. confirming their support in excess of 38% of the outstanding amount of the Ticade securities.
In addition to the support announced by the ad hoc committee, holders of securities representing 31.45% of the currently outstanding amount of the securities have already delivered their consents, which, combined with the holding stated by the ad hoc committee, would represent in excess of 69.45% of the currently outstanding principal amount of the securities.
The acceptance of the proposal by the necessary majority of holders of the securities would give the province temporary relief required to address the revenue constraints attributable primarily to the impact that the Covid-19 pandemic had on international oil prices during the earlier months of 2020 year as well as the need to dedicate incremental resources to alleviate the hardships imposed by the Covid-19 pandemic on Neuquens population.
8 5/8% Ticade securities
The province recently amended the consent solicitation relating to the Ticade securities to make the following changes:
Provide for the cash payment of $34.55 per $1,000 of principal amount of the Ticade securities outstanding as of the settlement date only to eligible holders whose validly delivered consent to amend their securities is accepted;
Increase the interest rates and modify the principal payment amortization schedule on the outstanding securities proposed in the first amendment and restated consent solicitation statement;
Modify Section 3.7(f) of the Ticade indenture relating to the replenishment of the debt service reserve account;
Remove the amendments to the Ticade indenture which were previously proposed in the consent solicitation relating to cross-series modifications.
Defer the release of collateral through the period from the settlement date up to, but not including, Nov. 12, 2022;
That certain excess collateral will be released following termination of the relief period if the royalties coverage amount, calculated on a pro forma basis for the four consecutive collection periods ending Nov. 11, 2022 and payments due on Nov. 12, 2022, Feb. 12, 2023, May 12, 2023 and Aug. 12, 2023) is met; and
That certain royalty coverage calculations will be performed by reference to the amounts that would be payable immediately after the relief period.
The province previously announced it is seeking the following in relation the Ticade securities:
To postpone the maturity date to May 12, 2030 from 2028;
To increase the interest rate on the outstanding Ticade securities from Nov. 12 to Nov. 12, 2021 to 3% per annum, to be increased to 5% per annum from Nov. 12, 2021 to Nov. 12, 2022 and increased to 7% per annum from Nov. 12, 2022 to the maturity date;
To have the first interest payment date be Feb. 12, 2021;
To allow the prepayment at par of $20 per $1,000 principal amount of notes outstanding on the settlement date;
To modify the amortization schedule to 31 quarterly payments, calculated as the principal amount outstanding divided by the number of remaining principal installments from and including the principal date to the maturity date with the first principal installment on Nov. 12, 2022;
To amend the cross-payment default and cross acceleration to exclude any default of event of default under the Tideneu notes unless modified under the Tideneu consent solicitation;
To modify the debt service reserve account indenture to allow release on the settlement date of up to $10.97 million and the replenishment of the debt service reserve account to at least equal to the interest due on the next succeeding payment date from the settlement date to and including Feb. 12, 2022; between Feb. 12, 2022 and May 12, 2022 the balance should be the interest due on the next payment plus an amount equal to 33% of the amortization amount due on Nov. 12, 2022; between May 12, 2022 and Aug. 12, 2022 the balance should be the interest due on the next payment plus an amount equal to 66% of the amortization amount due on Nov. 12, 2022; between Aug. 12, 2022 and Nov. 12, 2022 the balance should be the interest due on the next payment plus an amount equal to 100% of the amortization amount due on Nov. 12, 2022; and after Nov. 12, 2022 the balance should be at least the interest due on the next payment date plus 100% of the amortization amount due on the next payment date after the date of determination;
To provide for payment of an amount in cash equal to $33.40 per $1,000 outstanding as of the settlement date to eligible holders who validly deliver a consent to amend the securities and to adjust the specified royalties and modify the assigned percentages of such royalties, in each case payable to the province by concessionaires of dedicated areas that constitute part of the collateral of the Ticade securities to include royalties payable by concessionaires under concessions that are scheduled to expire after the maturity of the securities;
To replace all references to 8 5/8% secured notes due 2028 with secured senior step-up notes due 2030; and
To waive any limitations would not allow for the proposed amendments.
Consent considerations
For noteholders of Ticade securities who validly deliver a consent to amend their notes, the province will pay in cash an amount equal to unpaid interest under the notes from Aug. 12 to the settlement date.
The funds will come from the dollar debt service reserve account and only if the proposed amendments are validly adopted.
For noteholders of the Tideneu notes who validly deliver a consent, they will receive 75% of the interest accrued and unpaid from April 27 to the settlement date which will be paid in kind, in additional Tideneu notes.
Additionally, consenting noteholders will receive 25% of the interest accrued from April 27 to the settlement date in cash.
Similarly, the consent consideration on the Tideneu notes will only be paid if the supplemental indenture to the notes is executed.
Citigroup Global Markets Inc. is the consent solicitation agent (800 558-3745, 212 723-6106, ny.liabilitymanagement@citi.com).
Morrow Sodali is the information and tabulation agent (neuquen@investor.morrowsodali.com, Ticade securities consent website: https://bonds.morrowsodali.com/neuquenTICADE, Tideneu securities consent website: https://bonds.morrowsodali.com/neuquenTIDENEU, Hong Kong: +852 2158 8405, London: +44 20 7355 0628 and Stamford: 203 609-4910).
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.