Argentina has successfully concluded the restructuring and exchange of its debt issued under foreign legislation for a total amount of $66 billion.
Argentina had defaulted on its debt repayments for the ninth time in May, and had been set an August deadline to reach a new deal with its creditors.
Argentina obtained the required consents from the holders to exchange and or modify 99.01% of the aggregate principal amount outstanding of all series of eligible bonds, achieving a reduction of the interest rate and postponing the amortization of its debt issued under foreign legislation, thus generating savings for the country of approximately $38 billion during the next decade.
However, Argentina is not out of the woods yet, and is set to enter talks with the International Monetary Fund (IMF) to restructure its almost $40 billion debt with the financial institution. The government said this week that it aims to delay its payments to the IMF until at least 2024. Most of the repayments of the IMF debt are due in 2022 and 2023.
President Alberto Fernández said in August that he aims to reach an agreement with the IMF that is free of conditions on economic policy, such as the imposition of austerity measures, although observers believe that securing such a deal will be difficult.
BofA Securities, Inc. and HSBC Securities (USA) Inc. acted as dealer managers on the country’s debt restructuring, and their legal teams were led by Ria Dutta and Alanna Chang, respectively.
Lazard acted as financial adviser to the Republic of Argentina, while D.F. King acted as exchange, tabulation and information agent.
Cleary Gottlieb Steen & Hamilton assisted Argentina on matters under New York State law, through the team led by partner Andrés de la Cruz and associates Ignacio Lagos, Sofia Falzoni, in collaboration with the legal areas of the Ministry of Finance and the Treasury Attorney General’s Office.
Shearman & Sterling assisted the dealer managers in matters governed under New York State law, through the team led by partner Antonia Stolper, associate Maria Marulanda Larsen and international associate Sofía Gallo.
Argentine law firm Bruchou, Fernández Madero & Lombardi assisted the dealer managers in matters related to Argentine law, with a team led by partners José María Bazán and Alejandro Perelsztein and associates Juan Barros Moss and Cristian Ragucci.