Timing of the Exchange Offer
What is the timeline for accepting or rejecting the current Argentine government proposal?
The new deadline is August 28, 2020, and corresponds to the agreement to amend the July 6, 2020 amended exchange offer that Argentina announced in a press release on August 4 and set forth in the Invitation to Exchange dated August 17, 2020 (“Amended Exchange Offer”). You will need to accept or reject the Amended Exchange Offer by August 28. If you do nothing, it would have the same effect as rejecting.
If I do not accept now, will I be able to accept the offer before the deadline?
The Amended Exchange Offer expires according to it terms August 28. Unless the date is again extended or another offer is made, you would need to accept by that date.
I did not participate in the exchange that expired on May 8th. Has Argentina made a new exchange offer?
Yes, on August 17, 2020, Argentina issued amendment No. 2 to the Republic of Argentina prospectus supplement dated April 21, 2020, as amended and restated on July 6, 2020. The new date to accept is August 28.
Has Argentina improved its offer?
Yes. On August 17, 2020, Argentina issued amendment No. 2 to the Republic of Argentina prospectus supplement dated April 21, 2020, as amended and restated on July 6, 2020. The Amended Prospectus Supplement make numerous changes to the exchange offer that are favorable to the bondholders. The new date to accept is August 28.
Has Argentina accepted the Exchange Bondholder group's restructuring proposal?
Argentina’s current amended offer adopts numerous, but not all, elements of the Exchange Bondholder group’s restructuring proposal. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer.
Actions Needed to Accept the Amended Exchange Offer
How do I accept the Amended Exchange offer?
You should have received instructions from your broker or banker. If you have not, you will need to contact your broker or banker. The Exchange Bondholder Group can now confirm that it supports the debt restructuring proposal announced by The Republic of Argentina on August 4, 2020 and set forth in the August 17, 2020, amendment to prospectus supplement. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer. Note that if you do not accept the offer, it will have the same effect as a rejection so it will be necessary to take affirmative steps to accept.
I have heard that if the exchange offer is accepted, Argentina will automatically replace my old bonds with new ones even if I reject the offer. Is that true?
Only if the required thresholds under the collective action clause of the 2005 Indenture has been met. These thresholds are 75% of a single series of bonds or, if multiple series, 85% of the total and 66-2/3 percent of each individual series. If these thresholds are not met, only those holders who have affirmatively accepted the restructuring will be required to accept new bonds with less favorable terms. If you accept the offer, Argentina may exchange your bonds even if these thresholds are not met.
We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer in order to insure that new bonds are received.
If a bondholder takes no action whatsoever, will s/he be automatically subject to the majority outcome? In other words, if the exchange is agreed to by a majority, will I receive the new bonds?
Taking no action has the same effect as rejecting the offer.
A bondholder who takes no action will be required to accept new bonds only if the thresholds set forth in the collective action clause are met. These thresholds are 75% of a single series of bonds or if multiple series, 85% of the total and 66-2/3 percent of each individual series. If these thresholds are not met, only those holders who have affirmatively accepted the restructuring will be required to accept new bonds with less favorable terms. If you take no action, you will retain your original bonds. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer in order to insure that new bonds are received.
Are there benefits to tendering my bonds into the Amended Exchange Offer?
Taking no action has the same effect as rejecting the offer.
Yes, Bondholders who consent to the exchange prior to the August 28 expiration date will be eligible to receive additional consideration on account of accrued interest and will have greater ability to select the new bonds received.
There are several options of new bonds available for exchange bonds I hold. What option should I select?
You should select the new bond that is best for you. In some case, you will be able to select bonds with varying currency, maturity date, interest rate and payment schedule. We cannot make a recommendation and suggest you speak with your financial advisor if you are unsure of what is best for you.
Should I tender my bonds now or wait until August 28?
We suggest that all holders of Argentine bonds immediately commence the process of tendering into the exchange. The Exchange Bondholder Group recently announced that its members have committed to tendering nearly $3.7 billion in Exchange Bonds and more than $1.1 billion in Global Bonds on or before Monday, August 24 in connection with amended restructuring proposal. The group’s press release is available here. The Exchange Bondholder Group urges all holders of Exchange Bonds and Global Bonds to take immediate steps to tender and participate in Argentina’s external debt restructuring.
I’m still considering how to respond to the offer. What should I do?
Why would the holders of a Discount Bond under the 2005 Indenture participate? If I don’t participate, wouldn’t I either (a) keep my bond if the Proposed Modifications don’t occur, or (b) get my preferred New Bond Consideration if the Proposed Modifications does occur?
If you do not accept the offer, it will have the same effect as a rejection. If the required thresholds under the collective action clause of the 2005 Indenture are met, all holders will receive new bonds. If these thresholds are not met, only those holders who have affirmatively accepted the restructuring will lose their existing bonds and be given new bonds with less favorable terms. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer in order to insure that new bonds are received.
What do you consider the proper thing to do with the 2016 Indenture Bonds?
We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer in order to insure that new bonds are received
If a bondholder accepts Argentina’s initial exchange offer, but the required majority of bondholders do not accept the exchange, would the acceptance given by minority bondholders become null and void? Would the new bonds be excluded from default?
If you accept the offer, and it is not withdrawn by Argentina, you will receive the new bonds. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer in order to insure that new bonds are received.
Would you provide your perspective on the bonds governed by the 2005 Indenture given the holder’s comparatively stronger negotiating position with respect to the bonds governed by the 2016 Indenture
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. In general, the 2005 Indenture has much more creditor-friendly terms. It was negotiated as a part of Argentina’s earlier exchange offers, and has valuable economic terms that were included as an incentive for bondholders to accept that exchange offer.
In contrast to the 2016 Indenture, the 2005 Indenture:
Has significantly higher voting thresholds for approval of amendments.
Has a longer period of time to bring suit for non-payment of principle and interest.
Contains a broader waiver of sovereign immunity than in the 2016 Indenture.
Has a stronger pari passu clause than the 2016 Indenture, and contains language which can be relied on to allow bondholders to seek an injunction preventing Argentina from paying only the creditors it wants to and discriminating against others.
Expressly acknowledges the right of a beneficial holder to sue to collect principal and interest that are owed.
For more information, the PowerPoint from our webinar includes slides comparing the 2005 and 2016 Indentures and is linked here.
I hold bonds issued by the Province of Buenos Aires and am considering whether to participate in the recent exchange offer. Does this group have a position with respect to the Province of Buenos Aires’ exchange offer?
This is a group of Argentina Exchange Bondholders. There is another group that represents the interest of holders of Province of Buenos Aires bonds. We encourage you to contact Marcelo Delmar, who is advisor to that group, at marcelo@mens-sana.com.
Do you have a sense of what other people are planning to do?
What is the general reaction of bondholders to the offer?
Three well-organized bondholder groups have publicly expressed in press releases and a joint statement their support for the amended exchange offer from Argentina, announced in a press release on August 4, 2020 and now set to expire on August 28. We encourage all creditors to join us, the other principal bondholder groups and additional significant bondholders in accepting this offer.
Is misalignment in the position of the different bondholder groups impeding agreement on a deal with Argentina?
No. The Exchange Bondholder Group, the Ad Hoc Group of Argentine Bondholders and the Argentina Creditor Committee all support the amended restructuring proposal announced on August 4. These groups have submitted statements expressing their support, available here.
Does Argentina’s most recent offer take into account the impact of the Covid-19 pandemic and its impact on the Argentinian people and economy?
Yes. Argentina’s immediate top priority is and should be the health of its population and the protection of its vulnerable members. Creditors have communicated both directly and publicly their readiness to address Argentina’s near-term liquidity needs and consider this proposal to address these concerns.
Logistics
Is there a recording of the May 4, 2020 webcast available
Yes, the recording in English can be accessed here. The recording in Spanish can be accessed here. Transcripts of both recordings will be available on our website.
The PowerPoint and supporting materials are also available here, in English and in Spanish here.
Is the PowerPoint from the webinar or accompanying materials available?
Yes, the PowerPoint in English can be accessed here and both the English and Spanish versions of the PowerPoint will be available on our website.
A translated version of the PowerPoint in Spanish can be accessed here.
The information provided herein does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials are for general informational purposes only. You should contact your attorney or financial advisor to obtain advice with respect to any legal issue or for financial advice.
Use these materials herein does not create an attorney-client relationship with Quinn Emanuel Urquhart & Sullivan LLP.
The views expressed are the opinions of the individual authors and may not reflect the opinions of any entity they represent. Many of the opinions expressed, including those constituting forward looking statements, are inherently subjective, and other persons could reasonably form different opinions. The opinions of the authors and the entities they represent may change at any time.
All liability with respect to decisions made based on the contents of these materials is hereby expressly disclaimed. The content of the materials are provided "as is;" no representations are made that the content is error-free.
This information does not constitute investment advice, and the authors and the entities they represent expressly disclaim any investment advisory or similar relationship, express or implied, with any user of these materials. Responsibility for any investment decision(s) shall exclusively vest with the investor after analyzing all possible risk factors and by exercise of his/her/its independent discretion and the members of the Exchange Bondholder Group and Quinn Emanuel Urquhart & Sullivan LLP. shall not be liable or held liable for any consequences thereof.
