NEW YORK, Jan. 31, 2021 /PRNewswire/ -- Following constructive discussions with representatives of the Province of Salta (the "Province"), the Ad Hoc Bondholder Group (the "Ad Hoc Group") of the Province confirms it has reached agreement with the Province on the terms of a proposed debt restructuring and intends to support a consent solicitation expected to be launched shortly by the Province to effect certain amendments (the "Amendments") to its 9.125% Notes due 2024 (the "Notes") on such agreed terms. The agreed terms are available on the Province's website and are also set out in Table A below.
The Amendments are the product of good-faith negotiations between the Province and its bondholders and will provide the Province with appropriate debt relief in the form of coupon reductions and maturity re-profiling to assist in navigating the challenges of the Covid-19 pandemic.
The Province, which has an outstanding debt service record, will have the ability to re-direct cash flows in the near-term to important social priorities as well as to ensure continued funding for key capital projects. The Ad Hoc Group appreciates the responsible approach with which the Province conducted negotiations with its bondholders that allowed the Province to reach an agreement with the Ad Hoc Group before expiration of the grace period under the Notes and expects that credit markets will similarly take note.
Negotiations for the Ad Hoc Group were led by VR Advisory Services Ltd. The Ad Hoc Group holds approximately 40% of the outstanding Notes.
Table A
TERM SHEET FOR THE RESTRUCTURING OF INTERNATIONAL BONDS OF
THE PROVINCE OF SALTA
Transaction | Upon receiving the requisite consent of the holders of the Existing Notes in accordance with the terms of the indenture governing the Existing Notes, the Existing Notes will either be exchanged for new notes (the "New Notes") having the terms set out in this term sheet or the Existing Notes will be amended such that the Existing Notes will have the terms set out in this term sheet. For each U.S.$1,000 in principal amount of the Existing 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 | The New Notes will be issued on, and bear interest from, the Settlement Date and shall have the following terms:
1 June 2023 5%
|
Treatment of Accrued Interest | An amount equal to 60% of any and all accrued and unpaid interest on the Existing Notes outstanding as of the Settlement Date will be paid in cash on the Settlement Date and an amount equal to the remaining 40% will be paid in kind through the issuance of additional New Notes. |
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. |
Advisor Fees | The Province shall pay all reasonable fees and costs of the Holders on the Settlement Date. The one-off payment on account of such costs shall be made on the Settlement Date in the amount of U.S.$250,000. This amount shall be deducted from the cash portion of the accrued interest payable to holders of the Notes on the Settlement Date. |
Media Contact: Erin Hershkowitz, erin.hershkowitz@whitecase.com
