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Latham & Watkins Advises the Ad-Hoc Committee of Secured Bondholders on the Argentine Province of Neuquén’s Bond Restructuring

December 9, 2020
Neuquén is the second province to restructure its debt after the Argentine federal government’s default and subsequent restructuring earlier this year.

Latham & Watkins advised the Ad-Hoc Committee of Secured Bondholders in the restructuring of the Province of Neuquén’s US$317 million 8.625% Secured Notes due 2028. Holders representing 87.12% of the aggregate principal amount of the notes consented to amend certain terms of the notes, which became applicable to all of the notes through the indenture’s collective action provisions.

The restructuring relieved the Province’s payment obligations by resculpting the current amortization schedule to reduce near-term payments. The proposed relief will help the Province navigate the challenges it faces due to the impact of the COVID-19 pandemic and the fall in international oil prices. Moreover, the revised payment schedule accommodates the underlying cash flows from oil and gas royalty payments that secure the Province’s payment obligations pursuant to a collateral trust, resulting in a mutually beneficial outcome for both investors and the Province. The Ad-Hoc Committee of Secured Bondholders is comprised of institutional investors with significant investments in Argentina.

Latham fielded an inter-disciplinary team from its market-leading Latin America Practice, including members of its Capital Markets, Litigation & Trial and Project Development & Finance practices, led by partners Chris Clark and Roderick Branch, with associates Matthew Salerno, Carlos Ardila, Daniel Chor and Costanza García. The Committee was represented in Argentina by Martínez de Hoz & Rueda, with a team led by partner José Martínez de Hoz (nieto) alongside partners Martin Lepiane and Tomás Lanardonne.