NEW YORK and LONDON, Nov. 30, 2020 /PRNewswire/ -- Last week, the Coalition of Argentine Provincial Bondholders (the "CAPB"), which was formed by a group of international asset managers holding over $3 billion in bonds issued by Argentine provinces, published a statement of "Basic Principles" that should govern any restructuring of Argentine provincial debt. The Steering Committee of the Ad Hoc Group of Buenos Aires Bondholders (the "Group"), which comprises more than 40 institutions holding in excess of 49% of the external bonded debt of the Province of Buenos Aires (the "Province"), endorse the CAPB Basic Principles as providing a positive and constructive framework for finding a resolution of the Province's ongoing debt default.
The CAPB Basic Principles require, amongst other things, that provincial debt restructuring negotiations take place on the basis of transparency and good faith, with a view to addressing the true needs of borrowers, and with provinces committing to allocate a reasonable portion of fiscal capacity to debt service. By honoring these important concepts in future restructuring negotiations with the Group, the Province would create the opportunity for a truly consensual resolution. Such an outcome would in turn create the conditions for early restoration of the Province's access to international capital markets, to the benefit of the businesses and citizens of Buenos Aires. In the past, private international investment capital has proven a vital resource for the Province in financing critical infrastructure and other capital projects. The same can be true going forward so long as the legitimate rights and interests of bondholders are respected in the current restructuring process.
Although the Province has to date failed to engage with its bondholders to find a solution appropriate to its specific circumstances, the Steering Committee remains ready and willing to engage in good faith negotiations based on the roadmap provided by the CAPB Basic Principles. As previously stated, the Steering Committee continues to evaluate its available options, given the lack of a constructive approach from the Province to date.
