Argentina: Letter of Support of Joint Debt Restructuring Proposal

NEW YORK, July 27, 2020 /PRNewswire/ -- Global financial institutions representing 60% of the outstanding Exchange Bonds and 51% of the outstanding Global Bonds of Argentina's debt have collectively endorsed the below letter, sent to Minister Guzmán today, pledging their support for the Joint Proposal that the Ad Hoc Argentine Bondholder Group, the Argentina Creditor Committee, and Exchange Bondholder Group, submitted to the Republic on July 20.

The three major creditor groups, and various other investors, are working constructively with the authorities towards reaching a consensual resolution to Argentina's deal that is supported by a majority of creditors.

The Ad Hoc Argentine Bondholder Group is advised by White & Case LLP.

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July 27, 2020

Ministerio de Economía
Av. Hipólito Yrigoyen 250
C1086 AAB
Buenos Aires
República Argentina
Attention:  Minister Martín Guzmán

Re: Letter of Support of Joint Debt Restructuring Proposal

Dear Minister Guzmán:

For many months the Ad Hoc Argentine Bondholder Group, Exchange Bondholder Group, and Argentina Creditor Committee, together with others, have been engaged in good faith discussions with the Republic of Argentina (the "Republic") with the goal of achieving a consensual restructuring of the Republic's external debt.  In furtherance of this objective, on Monday, July 20, 2020 the three groups submitted to the Republic a Joint Debt Restructuring Proposal, a copy of which is attached hereto as Exhibit A (the "Joint Proposal"). 

The persons and entities listed below (the "Supporting Holders") are holders or investment managers or advisers to holders of Argentine Exchange Bonds or Global Bonds, each of which pledges its support for the Joint Proposal.  Collectively, the Supporting Holders hold 32% of the outstanding Exchange Bonds and 36% the outstanding Global Bonds.  When these figures are combined with other holders who have committed their support to the Joint Proposal but cannot be named for institutional reasons, supporters of the Joint Proposal represent 60% of the outstanding Exchange Bonds and 51% of the outstanding Global Bonds.

As you know, the Supporting Holders include some of the largest investors in Argentina, having committed very significant foreign direct investment in the country.  We are confident that a consensual resolution will provide a path towards even greater and more sustained investment in Argentina's growth sectors—including agribusiness, energy, mining, infrastructure and information technology—and a bright and sustainable economic future for Argentina's people. 

Supporting Holders:

AllianceBernstein
Amia Capital LLP
Amundi Asset Management
Aquila Asset Management ZH AG
Ashmore Investment Advisors Limited
Ashmore Investment Management Limited
Autonomy Capital (Jersey) L.P.
Ayres Investment Management LLP
BlackRock Financial Management, Inc. and its affiliates
BlueBay Asset Management LLP
Caius Capital LLP
Carronade Capital Management, LP
Contrarian Capital Management L.L.C
Dumont Global          
Farallon Capital Management, L.L.C.
Fidelity Management & Research Co.
GoldenTree Asset Management
Grantham, Mayo, Van Otterloo & Co. LLC
HBK Investments L.P.
Invesco Advisers, Inc.
Mangart Capital Management Ltd
Monarch Alternative Capital LP
Paloma Partners Management Company
Pharo Management (UK) LLP
T. Rowe Price Associates
Vega Asset Management
VR Advisory Services Ltd 
Wellington Management Company LLC
Western Asset Management Company LLC
Whitebox Advisors

Exhibit A

Joint Debt Restructuring Proposal of Ad Hoc Argentine Bondholder Group, Exchange Bondholder Group, and Argentina Creditor Committee

[See attachment.]

July 20, 2020 – Without Prejudice

Joint Debt Restructuring Proposal of Ad Hoc Argentine Bondholder Group, Exchange Bondholder Group, and Argentina Creditor Committee

Schedule I: Specific Terms of Each Series of New Bonds

The New USD Bonds 2030 will:

• Mature on July 30, 2030
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 12 equal semi-annual installments beginning in January 2025.

The New USD Bonds 2035 will:

• Mature on July 30, 2035;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 10 equal semi-annual installments starting in January 2031.

The New USD Bonds 2046 will:

• Mature on July 30, 2046;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 44 equal semi-annual installments starting in January 2025.

The New USD Bonds 2038 will:

• Mature on July 30, 2038;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 26 equal semi-annual installments starting in January 2026.

The New USD Bonds 2041 will:

• Mature on July 30, 2041;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 28 equal semiannual installments starting in January 2028.

The New USD 2030 PDI Bond

For every dollar or dollar equivalent of accrued interest, Holders of Existing Bonds will receive a New Bond that will:

• Mature on July 30, 2030;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 8 equal semiannual installments starting in January 2027.

The New EUR Bonds 2030 will:

• Mature on July 30, 2030;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in Euros in 12 equal semiannual installments starting in January 2025.

The New EUR Bonds 2035 will:

• Mature on July 30, 2035;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in USD in 10 equal semi-annual installments starting in January 2031.

The New EUR Bonds 2046 will:

• Mature on July 30, 2046;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in Euros in 44 equal semiannual installments starting in January 2025.

The New EUR Bonds 2038 will:

• Mature on July 30, 2038;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021.
• Pay principal in euros in 26 equal semiannual installments starting in January 2026.

The New EUR Bonds 2041 will:

• Mature on July 30, 2041;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021
• Pay principal in Euros in 28 equal semiannual installments starting in January 2028.

The New EUR 2030 PDI Bond will:

For every euro or euro-equivalent of accrued interest, Holders of Existing Bonds will receive a New Bond that will:

• Mature on July 30, 2030;
• Pay interest on a semi-annual basis in arrears, on January 30 and July 30 of each year, at the following annual rates:

• Coupons will be paid semi-annually, on January and July, as above, using a 30/360 daycount. The first coupon will accrue from September 4, 2020, and will be paid on July 30, 2021
• Pay principal in Euros in 8 equal semiannual installments starting in January 2027.

Schedule II: Bond Issuance Caps

* Issuance caps of the New USD 2030 and the New USD 2035 will be increased by the amount of EUR/CHF-denominated Exchange Bonds and Global Bonds that elect to be part of the currency exchange mechanism, and issuance caps for the New EUR Bonds 2030 and the New EUR 2035 will be reduced accordingly. For clarity, the restrictions applicable to Priority group 1 EUR, Priority Group 2 EUR and Group 3 EUR to exchange into a New EUR 2030 or a New USD 2030 are only defined by the cap on the New EUR 2030 instrument. Once the cap has been satisfied, holders that have the right to receive the New EUR 2030, and have elected to participate in the currency exchange mechanism, will receive a New USD 2030, with such issuance not being contemplated as part of the cap on the New USD 2030 defined in the table. At the same time, the issuance of the New EUR 2030 is reduced by the same amount.

Priority Groups

-  Priority Group 1 USD: Argent 2021 USD, Argent 2022 USD, Argent 2023 USD
-  Priority Group 2 USD: Argent 2026 USD, Argent 2027 USD, Argent 2028 USD (old), Argent 2028 USD (new)
-  Group 3 USD: Argent 46 USD, Argent 48 USD, Argent 2117 USD
-  Priority Group 1 EUR/CHF: Argent 2020 CHF, Argent 2022 EUR, Argent 2023 EUR
-  Priority Group 2 EUR/CHF: Argent 2027 EUR, Argent 2028 EUR
-  Group 3 EUR/CHF: Argent 47 EUR                            

Schedule III: Indicative Legal Terms 

SOURCE White and Case LLP