The trial against the Province of La Rioja for the defaulted bonds fell in the Court of Judge Jessica Clarke of the Southern District of New York, reported financial advisor Sebastián Maril.
18:24 | Wednesday, April 24, 2024 | La Rioja, Argentina | Fenix Multiplatform
In recent days, Maril had reported that the Beauregarde and Sandaglass funds filed a lawsuit against the Province of La Rioja, as they are demanding unpaid interest and amortization of the provincial bonds that have been in default since February 2024.
According to the specialized advisor, Beauregarde, an English fund, has USD 182.4 million in 2028 bonds; and Sandglass, Cayman Islands, has USD 5.4 million.
While the Ad Hoc Committee of Bondholders of the Province of La Rioja reported that on February 24, 2024, the Province of La Rioja did not make the timely payment of US$26.3 million of principal and interest owed under its Green Bonds. issued internationally. In this way, the province became the only province in Argentina to default on its international debt since the 2020-21 restructuring period.
While all other provinces with internationally issued debt have made capital amortization payments and paid their debt promptly, La Rioja stands out for failing to respect its contractual obligations. This failure is particularly egregious in light of the fact that the proceeds from the Green Bonds were used to build a series of wind farms, one of which was later sold for US$171 million to Pampa Energía SA. It is evident that the Province had the means to pay his debt, but decided not to.
Following its failure, the Province publicly commented that it would pay the interest (but not the principal) due on February 24 as a “sign of good faith.” While good faith implies full performance of contractual obligations (particularly in a case where bondholders’ money has generated a valuable return for the Province), bondholders have to date only received partial payment of the interest owed. Furthermore, the Province has not engaged in any dialogue with bondholders since its default and has not responded to a proposal to remedy the default submitted by the Ad Hoc Group (the “AHG”).
As a result, the AHG, through its attorney Quinn Emanuel Urquhart & Sullivan, LLP, has today sent a letter of reservation of rights to the Province. The letter asked the Province to pay the balance of the amounts the Province was obligated to pay on February 24 within 14 days. The AHG has reserved all its rights, including the right to declare the full principal amount of the Green Bonds immediately due and payable or take other measures, should the Province continue with its current position, it highlighted in a press release.
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