Restructuring Proposal by Ad Hoc Group of Buenos Aires Bondholders is Rejected Despite Meeting Province Demands for Reduced Debt Service Payments

NEW YORK, June 7, 2021 /PRNewswire/ — For over a month, members of the Steering Committee of the Ad Hoc Group of…

NEW YORK, June 7, 2021 /PRNewswire/ — For over a month, members of the Steering Committee of the Ad Hoc Group of Buenos Aires Bondholders (the "Group") engaged in restricted discussions with the Province of Buenos Aires (the "Province") aimed at reaching a consensual resolution to the existing payment defaults under eleven series of Notes issued by the Province (the "Notes"). 

On May 19, the Group made a restructuring proposal to the Province and, in turn, on May 28, the Province responded with a counterproposal, which the Province has since published (the "PBA Proposal").  While the Group believes that the Province has opportunistically sought more debt relief than is justified by its near and medium term financial outlook, on June 4, in an effort to consensually resolve this long-standing debt default, the Group presented the Province with a proposal (the "Group Proposal") accepting the total debt service envelope set forth in the PBA Proposal.  The Group Proposal also provided detail regarding the structure and terms of the new notes that would be issued to implement the restructuring.  A copy of the Group Proposal can be found at

The Group Proposal was based on the Province’s own total debt service envelope and offered: (a) substantial front-loaded cash flow relief through a reduction of more than 85% of current contractual obligations under the Notes over the next 3 years; (b) significant medium and long-term relief to allow the Province to rebuild a sustainable economic framework; and (c) a resolution to long-standing defaults under the Notes and the litigation related thereto. 

Despite the foregoing, the Province rejected the Group Proposal citing dissatisfaction with certain aspects of the structure of the new notes that have virtually no impact on the affordability of the proposal. 

A careful examination of the facts makes it abundantly clear that the Province’s rejection of the Group Proposal had nothing to do with legitimate concerns about debt sustainability.  In fact, the Group Proposal provided more than ample room for the Province to meet all of its fiscal needs and offered debt service relief well beyond what other provinces have agreed with their creditors.  Put simply, the Group Proposal was the most generous debt restructuring proposal put forth by creditors of any Argentine province in the current restructuring cycle, as shown above.


It should also be noted that the Province’s regrettable rejection of the Group Proposal occurred in the context of a rapid recovery in economic activity and fiscal revenues in Argentina, bolstered both by normalization and by the extraordinary improvement in commodity prices and, hence, Argentina’s terms of trade. In light of this ongoing economic recovery and normalization, and the Province’s continued attempts to behave in an opportunistic manner and with disregard for the legitimate expectations of its bondholders, the Group has now formally revoked the Group Proposal.         

The Province has been in payment default under the Notes for over a year.  The members of the Group are disappointed that the Province continues to play tactical games with bondholders rather than approach restructuring negotiations responsibly in the spirit of good faith.  As the economic environment in the Province continues to improve, the Group will expect that any future proposals from the Province fairly reflect the Province’s true debt service capacity as it evolves over time in a manner consistent with the Basic Principles for Restructuring of Argentine Provincial Debt published by the Coalition of Argentine Provincial Bondholders.  In the meantime, the Group intends to vigorously pursue the legal proceedings that were initiated in March, and reserves in full their right to exercise additional available remedies at any time.

The members of the Group are represented by White & Case LLP.

White & Case LLP
Erin Hershkowitz in New York
T +1 646 885 2200





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