Argentinian state-backed energy company YPF amended a proposal for a $6.2bn bond swap after complaints from bondholders. YPF launched the initial offer on January 7 in a bid to stretch out maturities, delay interest payments and reduce near-term capital payments. The initial offer brought immediate disdain from large holders of the 7 bonds in the swap, who retained law firms Dechert and DLA Piper to block the restructuring proposal.
YPF had set a 60% participation of bondholders as the minimum to achieve a quorum in an extraordinary meeting to restructure the bonds. To approve the proposal, only half plus one of that participation was required. If a second proposal were to be made, 30% participation would be needed to achieve a quorum and then half plus one to approve it, according to the original offer reported by LatinFinance. Raised concerns involved YPF’s ability to easily reach quorum due to state banks and entities, such as ANSES, being large bondholders that would likely cede under political pressure. YPF changed the collective action clause to bring it in line with the international standard of 50% approval from bondholders. The rest of the offer remains the same: a swap of 7 international bonds for new bonds with longer maturities, similar interest rates and no capital reduction, a deal YPF wants to conclude by February 4. The bookrunners for the offer are Citi, Santander, HSBC and Itaú. YPF’s longer dated bonds have lost over 10 points over the past week with its 8.5% 2029s and 7% 2047s down ~11 points to 57.19 and 61.75 cents on the dollar respectively.
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