Argentina bondholder groups reject exchange offer, seek alternatives

By Marisa Wong

Los Angeles, May 4 – The ad hoc group of major institutional holders of Argentina’s external sovereign debt, the Argentina creditor committee and the ad hoc group of holders of Argentina’s exchange bonds issued a joint statement on Monday to reiterate that they cannot support Argentina’s recently launched exchange offer and make clear that they will not tender their bonds under that offer.

The three bondholder groups said they will not participate in the exchange offer, because, among other reasons, they believe the terms require bondholders to “bear disproportionate losses that are neither justified nor necessary.”

However, the three bondholder groups said they are prepared to constructively engage with Argentina on finding a solution to the republic’s financial challenges when its government is ready to do so.

Each group has already publicly rejected the commercial terms proposed by Argentina for the restructuring of the republic’s external debt, as previously announced.

On Saturday the ad hoc group of Argentina’s exchange bondholders had announced a webinar for investors considering whether to participate in the exchange offer.

The webinar was scheduled to take place at 1 p.m. ET on Monday.

The exchange bondholder group set out to explain why bondholders should reject the current offer in addition to discussing the economics of Argentina’s offer and legal issues to consider in deciding whether to consent.

Bondholders have the option to withdraw their consents before the offer terminates on May 8.

The exchange bondholder group is comprised of 20 investment institutions and collectively holds over 15% of the outstanding exchange bonds issued by Argentina under its 2005 indenture and 2010 indenture supplement. Exchange bonds were issued to investors who participated in the 2005 and 2010 debt exchanges, through which bondholders voluntarily accepted large reductions in net present value to assist Argentina’s recovery from the 2001 default.

As previously reported, the ad hoc group of institutional holders of external sovereign debt currently holds, collectively, more than 25% of Argentina’s post-2016 bonds and more than 15% of its exchange bonds.

© 2015 Prospect News.
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