Argentina’s province of Salta begins consent solicitation for 9 1/8% notes due 2024

Chicago, Feb. 8 – The Argentinian province of Salta started a consent solicitation on Saturday to amend its $350 million outstanding 9 1/8% notes due 2024, according to a press release.

A group of noteholders representing about 40% of the notes has expressed support for the terms of the consent solicitation.

The province needs consents from noteholders representing at least 75% of the notes.

The amendments will reduce the coupon and extend the maturity date of the notes to Dec. 1, 2027.

The coupon will be reduced to 4% from the settlement date to June 1, move up to 5% from June 1, 2021 to June 1, 2022 and then go up to 8˝% on June 1, 2022 for the rest of the life of the notes.

Unpaid and default interest through the settlement date will be waived. Interest would start to accrue again after the settlement date, and interest after the amendment would be paid on June 1 and Dec. 1 each year.

Additionally, the record dates of the notes will be shifted to May 31 each year, from Nov. 30.

Also, the amortization schedule would be amended to 10 semiannual installments starting June 1, 2023.

The company would pay 5% of the principal amount on the first two dates, 7.5% on the next two dates and 12.5% on each of the next six dates.

In the amendment, the minimum denominations of the notes would be modified to $1.00 and multiples of $1.00 in excess thereof from $150,000 and multiples of $1,000 in excess thereof.

The province would acknowledge the right of any beneficial holder of the notes to pursue a remedy under the indenture with respect to the portion of the relevant global security that represents such a beneficial holder’s securities as if certified securities had been issued to the holder.

The definition of “reserve matter modification” will be amended.

The amendment would also change all references to 9 1/8% notes due 2024 with step-up notes due 2027 in the indenture.

Consenting noteholders who validly deliver a consent on or prior to the expiration time will receive a consent consideration consisting of the accrued and unpaid interest from July 7, 2020 to Jan. 7, 2021 and the interest from Jan. 7, 2021 to the settlement date, payable partially in cash and partially paid in kind.

The cash consent consideration will exclude transaction expenses and will be paid based on a pro rata consideration of $12,083,021. The transaction fee is $250,000 and will be applied on a pro rata basis.

The paid-in-kind consideration will consist of additional notes.

The consent solicitation will expire at 5 p.m. ET on Feb. 19.

BofA Securities, Inc. is the solicitation agent.

D.F. King & Co. Inc. is working as the information and tabulation agent (212 269-5550 or 866 342-3676, www.dfking.com/salta).

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