Latham & Watkins Advises on Argentine Province of Chubut’s Bond Restructuring

The revised terms provide liquidity relief to the Province and extend the maturity of the notes through 2030.

December 18, 2020

Latham & Watkins advised the Ad-Hoc Group of Institutional Bondholders of the Argentine Province of Chubut in favor of the Province’s consent solicitation to modify the terms of its outstanding US$650 million 7.75% secured amortizing notes due 2026. Holders representing 90.02% of the aggregate principal amount of the notes consented to amendments that provide significant near-term liquidity relief to the Province by revising the notes’ amortization profile to reflect the underlying cash flows of the collateral trust securing the Province’s payment obligations.

The revised terms of the notes provide various structural enhancements that the Ad Hoc Group believes are “a testament to the strength of the collateral trust financing structure” and that “will preserve such structure as a financing mechanism for the Province in the future.” These enhancements included disclosure requirements, an interest rate step-up after October 2021, additional covenants, and additional royalties pledged under the amended collateral trust structure.

Latham also advised the Ad-Hoc Committee of Secured Bondholders in the restructuring of the Argentine Province of Neuquén’s US$317 million 8.625% Secured Notes due 2028. Both restructurings followed the Argentine federal government’s default and subsequent restructuring earlier this year.

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.

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