Through Communication “A” 8036/2024 published this Monday in the Official Gazette and addressed to financial entities, the central bank issued a resolution regarding the acquisition of Public Debt Securities Series I issued by the Municipality of the City of Mendoza.
Specifically, the BCRA informs financial entities that it will not raise objections to the purchase of Series I Public Debt Securities. for a total amount of up to $500 million, issued by the commune commanded by Ulpiano Suarez. Thus, financial entities must comply with the provisions on credit risk fractionation provided for in current regulations.
“Do not make observations, within the framework of the restriction contained in point 2.1. of the regulations on ‘Financing to the non-financial public sector’, that financial entities can acquire Series I Public Debt Securities for up to the total amount of $500,000,000, to be issued by the municipality of Mendoza –province of Mendoza– , within the framework of Ordinances No. 4,130/22 and No. 4,163/23, municipal Decree No. 842/23 and provincial Decree No. 1,703/23”highlights the Central Bank Communication.
In this sense, municipal decree 842/23 refers to the issuance of “Green Bonds”destinated to “investment in sustainable and socially responsible assets in diverse areas such as renewable energy, energy efficiency, clean transportation or responsible waste management.” The financial agent hired for the operation is Banco Galicia.
The funds will be used to develop and launch a solar park Located in the District 33 and other solar interventions
In relation to the first project, it is a solar installation of approximately 500 kW of nominal power and will be associated with a distributed generation system on grid (system connected to the distribution network), whose purpose is supply different municipality consumptionfrom clean and sustainable energy.
At the same time, other small strategic interventions in public spaces of the City, such as the Central Park. For this purpose, Suarez signed an agreement in September of last year with authorities of the Mendocina Energy Company (Emesa).
The keys
- Amount: Up to $500 million
- denomination currency: Argentine pesos.
- Issue and Settlement Date: will be informed in the Subscription Notice.
- Due date: Up to 24 months from the date of
Issuance and Settlement. - Interest rate: The Debt Securities will accrue interest at an annual variable interest rate, equivalent to the Reference Rate plus the Cut-Off Margin (as defined from time to time) which will be determined on the offer date and before the Issuance and Settlement date.
- Reference rate: It will be determined as the interest rate for fixed-term deposits of more than one million pesos, from 30 to 35 days, – Badlar Private Banks – or the one that replaces it in the future, calculated considering the simple arithmetic average of the rates daily published by the Central Bank of the Argentine Republic from the ten business days prior (inclusive) to the beginning of the Interest Accrual Period and until the ten business days prior to the end (exclusive) of the Interest Accrual Period.
- Cutting margin: is the amount of basis points, expressed as a nominal annual percentage, in addition to the Reference Rate that may be determined on the date of the offer and before the Issuance and Settlement Date and reported through the Results Notice.
- Amortization: in installments or in full at maturity as determined by the Ministry of Finance that opportunely approves the issuance of the Debt Securities.
- Integration: in Argentine pesos.
- Warranty: assignment as guarantee of funds from the Municipal Participation Regime.
- Placement mechanism: public offer, through markets authorized by the
National Value Comission. - Instrumentation form: the debt securities will be represented by a
Global Certificate to be deposited in Caja de Valores SA. The holders of the Debt Securities will waive the right to demand the delivery of individual sheets. The transfers will be made within the collective deposit system, in accordance with Law No. 20,643 “Regime for the Purchase of Private Securities”, with the Caja de Valores SA being authorized to collect fees from depositors. - Framework for the Issuance of Green Bonds: Debt Securities may be issued in accordance with the provisions of the BYMA Guide and the BYMA Regulation, and may be
find the four main components of the ICMA GBP aligned.
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