Argentina’s AySA starts exchange offer, consent bid on notes due 2023

Chicago, Nov. 21 – Agua y Saneamientos Argentinos SA (AySA) commenced an exchange offer and consent solicitation for any and all of its $500 million outstanding 6 5/8% senior notes due 2023 (ISIN: XS1763161012), according to a press release.

The company is offering to exchange the existing notes for 7.9% senior notes due 2026 and cash.

Non-consenting tendering noteholders will receive new notes in a principal amount that will be determined by multiplying 99% by $1,000 minus the cash consideration received.

Consenting tendering holders will receive new notes in a principal amount that will be determined by multiplying 99.75% by $1,000 minus the cash consideration received.

The early tender date cash consideration is $350 per $1,000 notes plus $50 for each $1,000 note tendered after the early tender date but before the late tender date, allocated pro rata to eligible early tendering noteholders.

The late tender cash consideration is $300 per $1,000 note.

Accrued interest will also be paid to the settlement date.

There is a minimum tender condition for 95% of the outstanding existing notes.

The concurrent consent solicitation would eliminate some events of default under the indenture.

There are already enough consenting supporting creditors to consent to the proposed amendments. An ad hoc group of holders of the existing notes consisting of Callaway Capital Management, LLC, GoldenTree Asset Management LP, Moneda SA Administradora General de Fondos, Sandglass Capital Advisors LLC, Shiprock Capital Management LLC and VR Advisory Services Ltd. have agreed to tender their notes and consent to the proposed amendments. The ad hoc group represents 80% of the existing notes.

However, the ad hoc group conditionally supports the consent solicitation only if the minimum tender condition is met. Should the minimum condition not be met, the company would need to work with the group if the minimum condition is waived.

Should the exchange offer not achieve the minimum condition, the company may start a new offer or amend the offer to solicit consents for a proposed out-of-court restructuring.

The early tender deadline is 5 p.m. ET on Dec. 8. The company is seeking the required consents by the early deadline.

The offer and solicitation will expire at 11:59 p.m. ET on Dec. 19.

Settlement is planned for Dec. 22.

A holders’ meeting is being convened on Dec. 16.

BofA Securities, Inc. (646 855-8988, 888 292-0070), HSBC Securities (USA) Inc. (212 525-5552, 888 HSBC-4LM, lmamericas@us.hsbc.com) and AdCap Securities Ltd. (646 280-8732, liabilitymanagement@adcap.com) are the dealer managers.

Morrow Sodali Ltd. is the information, exchange and proxy agent for the offer (203 609-4910, +44 20 4513 6933, aysa@investor.morrowsodali.com).

The company is the largest water utility in Argentina and majority owned by the republic.

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