​Province of Buenos Aires extends once more the deadline to accepts its debt negotiations to 10 AM EST

ARGENTINA - In Brief 04 Feb 2020 by Esteban Fernández Medrano
In the middle of the political commotion of the unexpected death this morning of the federal judge Claudio Bonadio, who headed key judicial trials against Christina Fernandez de Kirchner, and while the National Government makes announcements of its planned schedule to renegotiate its debt, the Province of Buenos Aires extended once more this morning the deadline to accept its restructuring proposal from 6 am to noon today BA time (10 am EST). This reflects the difficulties it faces to reach the 75% acceptance rate it needs to apply collective action clauses to modify the BP21 bond maturity. If the Province of Buenos Aires does not reach the needed support by tomorrow (another postponement today could be possible) it would officially enter into default of its USD 750M bond, with a 10,875% coupon and 2021 maturity. While such an event does not, in principle, affect the debt restructuring process for the National Government, it would send a warning signal regarding the market's willingness to concede a debt restructuring without the prior trauma of a debt default. In particular considering, that the Province of Buenos Aires had already improved its original proposal, which asked for a postponement of the debt payments, from January 26 to May the 1st, by offering now cash payments of 30% of the capital amortization and the interests due to the extension of the payment to May the 1st. True, the payment date of May the 1st is largely symbolic, as the Province of Buenos Aires is gaining time to see the results of the debt restructuring of the National Government, to make a similar “long term” debt restructuring proposal. In that sense, the proposal to offer 30% of the origina...

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