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Ad Hoc Group of Entre Rios Bondholders Provides Province with Counterproposal at Conclusion of Restricted Discussions


NEW YORK, Dec. 31, 2020 /PRNewswire/ — Over the past month, the Ad Hoc Group of Entre Rios Bondholders (the “Group”) has engaged in a series of restricted discussions with the Province of Entre Rios (the “Province”) in an attempt to negotiate a consensual resolution to the Province's existing default under its outstanding 8.75% Notes due 2025 (the “Notes”).  In the latest round of restricted discussions, which concluded on December 29, the Province presented the Group an amended proposal with respect to the restructuring of the Notes, which the Province has since published.  The Group, which includes institutional investors holding 60% of the Notes, rejected the terms of the latest proposal as being unjustified by the Province's current economic and fiscal realities.  Instead, the Group delivered a counterproposal (attached as Annex A to this statement) setting forth the terms on which the Group would be prepared to agree a restructuring of the Notes.

The Group's counterproposal would extend until 2028 the maturity date of the Notes and provide for an extended amortization schedule to further smooth out the Province's debt profile.  In addition, the counterproposal would provide the Province with a call option exercisable at any time after the Notes' original maturity date in 2025.  The Group believes its counterproposal offers sufficient cash flow relief to support the Province's near-term fiscal challenges due to the impact of COVID-19 without imposing unnecessary losses on the Province's credit providers.

The Group is disappointed that the Province continues to pursue a selective default on the Notes despite maintaining a strong fiscal position, continuing to honor all of its other debt obligations and having sufficient funds to service the Notes.  Although the Group is prepared to agree appropriate adjustments to the terms of the Notes as set out in the attached counterproposal, it does not consider the Province to be in debt distress or to be facing a plausible scenario of debt distress in the foreseeable future.   The Group believes the Notes are fully serviceable by the Province in accordance with their existing terms, and, so long as the Province continues to pursue fiscally responsible policies, should be refinanceable at maturity.  By its own budget projections, the Province's debt service ratios are robust and have not deteriorated since 2017 when it issued the Notes.  The figures in the following table clearly demonstrate that debt sustainability of the Province has not been compromised:

Province of Entre Rios Debt Indicators


2021 Budget

% of Current Resources




Total Debt Service



Total Debt Outstanding



Total Debt in US$mm



Total Debt as Provincial Gross Product



Source: Province of Entre Rios official budget publications

Finding a consensual resolution to the current debt default is necessary to restore the Province's credit standing and access to capital markets, as well as to foster a credible investment climate in the Province. The discussions over the month of December have made it evident to the Group that the Province's default is borne not of financial necessity but rather of choice. 

Accordingly, while the Group continues to stand ready to negotiate with the Province in good faith, the Group is actively considering its alternative available options and stands prepared to exercise its legal and contractual rights under the Notes at any time.

Annex A



December 26, 2020

This term sheet sets out the key commercial terms upon which the Province of Entre Rios Ad Hoc Bondholder Group (the “Group“) is willing, in principle, to restructure the international bonds issued by the Province of Entre Rios (the “Transaction“).  This term sheet is not exhaustive, does not constitute or imply a commitment by the Group to a restructuring transaction nor is it intended to constitute a legally binding agreement between the Province of Entre Rios and the Group.  The completion of the Transaction is subject, among other things, to execution of definitive documentation and satisfaction of customary closing conditions, in each case in a form to be mutually agreed.


The Transaction relates to the Province of Entre Rios's U.S. $500,000,000 8.750% Notes due 2025 (the “2025 Bonds“). 

Holders of the 2025 Bonds will be invited to exchange their bonds for new bonds maturing in 2028 (the “New 2028 Bonds“). 

Exchange Consideration

Holders of 2025 Bonds who participate in the Transaction will receive at settlement, for each U.S. $1000 principal amount of 2025 Bonds tendered in the exchange, U.S. $1000 principal amount of New 2028 Bonds.

New 2027 Bonds

The New 2028 Bonds will be issued on, and bear interest from, the settlement date and:

     • Mature on February 8, 2028.
Amortise in 11 equal semi-annual installments commencing February 8, 2023.
Bear interest at a rate of:
5.00% per annum, payable in cash semi-annually in arrears, from the settlement date until August 8, 2022, with the first coupon payable on February 8, 2021 (short first coupon); and; 
8.750% per annum, payable in cash semi-annually in arrears, from August 8, 2022 until maturity.
Be callable at par after February 8, 2025 (the original maturity date of the 2025 Bonds).

Treatment of Accrued Interest

Any and all accrued and unpaid interest on the 2025 Bonds as of the settlement date will be paid in full in cash on the settlement date. 

Legal Documentation for Transaction

To be mutually agreed by the parties.

Advisor Fees

Province of Entre Rios to pay the reasonable fees of the Group's legal advisers at settlement.

White & Case LLP
Erin Hershkowitz in New York
T +1 646 885 2200


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SOURCE White & Case LLP

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