Corporate Debt Restructuring Masterclass

18 July 2022 (Mon), 5pm Singapore/HK time

Argentina’s largest province Buenos Aires, remains stuck as one of its largest creditors, GoldenTree Asset Management rejected a revised debt restructuring proposal by the province after extending the deadline more than 12 times. GoldenTree proposed a counteroffer that the province described as “a material digression from terms that the Province could consider meaningful.” Buenos Aires did not succeed in renegotiating around $7bn of overseas debt, after Argentina struck a deal to restructure $65bn in bonds over six months ago. Most provinces have managed to find their own agreements to restructure debt since then. Buenos Aires’ debt restructuring proposal, originally published in April, is due to expire on March 26. The province has been in default for almost 12 months, having missed a bond payment worth $150mn in May. The latest update proposed extending maturities on new bonds from 2032 and 2040 to 2031 and 2039. Dollar and euro-denominated bonds hold a coupon payment from 1% for all the notes and up to 5.95% for one of those bonds. Principal payments commence December 2024. This renewed offer has a net present value of about 65 cents on the dollar at a 10% exit yield, up from 50 cents on the dollar for the original offer. Other provincial restructurings have achieved to close deals with NPVs close to 90%. “I expect another deadline extension and more complicated talks to try to find common ground. “This is far from over,” Pablo Waldman, head of strategy at StoneX Argentina said.

Buenos Aires USD 7.875% 2027s and USD 9.625% 2028s were up 4.42 to 37.05 and 3.3 to 37.36, yielding 30.41% and 32.97% respectively.

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