Argentina in $63.4 Billion Debt Restructuring

Cleary Gottlieb represented longtime client the Republic of Argentina (Argentina), in its successful invitation to exchange and consent to certain proposed modifications that resulted in the restructuring of approximately $63.4 billion outstanding aggregate principal amount of Argentina’s foreign-law governed debt or 99.01% of the aggregate principal amount of the 25 series of bonds targeted in the offer.

BofA Securities Inc. and HSBC Securities (USA) Inc. served as dealer managers.

The invitation initially launched on April 21, 2020, was most recently amended and restated on August 17, 2020, expired on August 28, 2020, and settled on September 4, 2020.

In total, holders of 93.4% of the of the aggregate principal amount outstanding of all 25 series of eligible bonds (of which eight had been issued under the 2005 indenture and 17 had been issued under the 2016 indenture and had maturity dates as early as October 2020) accepted Argentina’s invitation to exchange their eligible bonds for new bonds to be issued by Argentina (with maturities ranging from 2029 to 2046). 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, 99.1% of Argentina’s eligible bonds were exchanged or modified.

The new bonds issued as a result of Argentina’s invitation include certain adjustments to the CACs that, by clarifying their deployment in future debt restructurings, strengthened CACs, and the overall architecture of sovereign debt restructurings.