Province of Buenos Aires’ $7.1 Billion Debt Restructuring

Cleary Gottlieb represented The Province of Buenos Aires in the transaction.

The Province of Buenos Aires (the “Province”), a province of the Republic of Argentina, completed its successful invitation to exchange and consent to certain proposed modifications that resulted in the restructuring of approximately US$7.1 billion outstanding aggregate principal amount of the Province’s foreign-law governed debt, or 97.66% of the aggregate principal amount of the 11 series of bonds targeted in the offer.

BofA Securities and Citigroup Global Markets served as dealer managers. The invitation initially launched on April 24, 2020, was most recently amended and restated on August 6, 2021, expired on August 27, 2021, and settled on September 3, 2021. 

In total, holders of 93.23% of the aggregate principal amount outstanding of all 11 series of eligible bonds (of which 6 had been issued under the 2006 Indenture and 5 had been issued under the 2015 Indenture and had maturity dates as early as May 2020) accepted the Province’s invitation to exchange their existing bonds for new Euro and USD bonds to be issued by the Province (maturing in 2037 and paying installments on principal beginning on 2024 or 2028, depending on the series). They also gave their consent to modify the eligible bonds of the relevant series that remain outstanding after giving effect to the exchange offers by substituting them for new bonds, pursuant to the collective action clauses (“CACs”) included in the relevant indentures. After giving effect to the CACs, 97.66% of the Province’s eligible bonds were exchanged or modified.

The new bonds are expected to be listed on the Luxembourg Stock Exchange and the Bolsas y Mercados Argentinos S.A. (the “ByMA”) and each series of the new bonds is expected to be admitted for trading on the Euro MTF Market and the Mercado Abierto Electrónico S.A. (the “MAE”).

Through the restructuring, the Province obtained relief by way of a reprofiling of the current amortization schedule and reductions in interest rates. The relief sought by the Province through the restructuring of the bonds had the primary goal of restoring debt sustainability levels in the light of current conditions in Argentina generally and on the Province’s economy in particular, as well as the measures undertaken by the Province to date to address such conditions.

The Cleary Gottlieb deal team was led by partners Andrés de la Cruz (Picture) and Juan Giráldez and included associates Rita Sobral, Ignacio Lagos and Sofia Falzoni, international lawyer Juan Leguizamo and law clerk Nicholas Koeppen. Partner Jason Factor and associates Alexander Cadmus and Victoria Ju advised on tax issues. Partner Carmine Boccuzzi, associate Rathna Ramamurthi and law clerk Rebecca Rubin advised on litigation matters. Andrés de la Cruz and Juan Leguizamo are based in Buenos Aires. Juan Giráldez is based in Sao Paulo. All other lawyers are based in New York.

Involved fees earner: Carmine Boccuzzi – Cleary Gottlieb Steen & Hamilton; Alexander Cadmus – Cleary Gottlieb Steen & Hamilton; Andrés De la Cruz – Cleary Gottlieb Steen & Hamilton; Jason Factor – Cleary Gottlieb Steen & Hamilton; Sofia Falzoni – Cleary Gottlieb Steen & Hamilton; Juan Giráldez – Cleary Gottlieb Steen & Hamilton; Victoria Ju – Cleary Gottlieb Steen & Hamilton; Ignacio Lagos – Cleary Gottlieb Steen & Hamilton; Juan Ignacio Leguízamo – Cleary Gottlieb Steen & Hamilton; Rathna Ramamurthi – Cleary Gottlieb Steen & Hamilton; Rita Sobral – Cleary Gottlieb Steen & Hamilton;

Law Firms: Cleary Gottlieb Steen & Hamilton;

Clients: Province of Buenos Aires;