The Province of Chaco Reaches Agreement in Principle to Restructure its 9.375% Notes due 2024
RESISTENCIA, Argentina, April 12, 2021 /PRNewswire/ -- The Province of Chaco (the "Province") announced today that it has reached an agreement in principle with an ad hoc group of bondholders represented by VR Advisory Services Ltd (the "Ad Hoc Group") representing approximately 50 % of its 9.375% Notes due 2024 (the "Notes"), for the Ad Hoc Group to support a proposal to restructure the Notes (the "Proposal"). The Proposal is the product of good-faith and constructive negotiations between the Province and the Ad Hoc Group. The key terms of the Proposal are set out in Table A below.
The formal launch of the restructuring transaction is expected to occur in the short term, subject to obtaining certain governmental approvals and the preparation of definitive documentation. There can be no assurance that such approvals and documents will be obtained or finalized as expected or that the transaction will be consummated.
If the transaction is successfully consummated, the transaction is expected to provide the Province with significant debt service relief in the form of coupon reductions and maturity reprofiling. In particular, it will help the Province re-allocate financial resources to finance urgent important social priorities as well as ensure continued funding of key infrastructure projects.
This announcement is for informational purposes only and is not an invitation, an offer of securities or a solicitation of consents from any holders of Notes. Before making a decision with respect to their Notes, eligible holders of Notes are urged to review the documentation that may be issued by the Province and evaluate the risks associated with the transaction described therein.
NONE OF THE PROVINCE, ITS ADVISORS OR AGENTS, NOR ANY OF THEIR RESPECTIVE DIRECTORS, EMPLOYEES, AFFILIATES, AGENTS OR REPRESENTATIVES MAKES ANY RECOMMENDATION AS TO WHETHER ELIGIBLE HOLDERS SHOULD PARTICIPATE IN ANY TRANSACTION THAT MAY BE ANNOUNCED BY THE PROVINCE.
The transaction that may be announced by the Province will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law and any securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
Forward-Looking Statements
This announcement contains forward-looking statements. Forward-looking statements are information of a non-historical nature or which relate to future events and are subject to risks and uncertainties. No assurance can be given that the transaction described herein will be consummated or as to the ultimate terms of any such transaction. The Province undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.
TABLE A
Transaction
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The Notes will be exchanged, following approval by the requisite majority of the holders of the Notes in accordance with the terms of the indenture, into new notes (the "New Notes") having the terms set out in this term sheet. For each U.S.$1,000 in principal amount of the Notes held by the Holder as of the settlement date for the Transaction (the "Settlement Date"), such Holder shall receive U.S.$1,000 in principal amount of New Notes. |
Terms of the New Notes
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The New Notes will be issued on, and bear interest from, the Settlement Date and shall bear the following terms:
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Treatment of Accrued Interest
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60% of all accrued and unpaid interest outstanding under the Notes as of the Settlement Date will be paid in cash on the Settlement Date and the principal amount of the New Notes shall be increased by the remaining 40%. The accrued and unpaid interest on all outstanding Notes (split between cash and PIK portions as set out above) shall constitute consent consideration that shall be distributed pro rata only to the consenting holders of the Notes. The non-consenting holders of the Notes shall not be entitled to any consideration with respect to the accrued and unpaid interest. |
Legal Documentation |
To be mutually agreed by the parties. The amendments to the existing indenture shall include improvements to enforceability of the holders' rights under the Notes. |
Fees and Costs
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The Province of Chaco will cover all reasonable fees and costs of the Ad Hoc Group. The amount of such fees and costs shall be deducted on a pro rata basis from the cash portion of the accrued interest payable to holders on the Settlement Date |
Information Agent: Morrow Sodali Ltd., Email [email protected]
SOURCE The Province of Chaco
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