Neuquén in Successful $914 Million Sovereign Debt Restructuring

December 4, 2020

Cleary Gottlieb represented the Province of Neuquén (Neuquén), a province of the Republic of Argentina, in the successful restructuring of its outstanding notes and loans.

The outstanding notes included its Series 1 (Tranches 1 and 2) 8.625% secured notes due 2028 for $317 million (TICADE securities) and its Series 1 7.5% notes due 2025 for $366 million (TIDENEU notes). The outstanding loans were restructured for $199 million under a secured credit agreement with Credit Suisse AG, London Branch as administrative agent and the lenders party to the credit agreement.

The restructuring of the outstanding notes resulted from successful consent solicitations to amend certain terms and conditions to the indentures governing the notes, while the restructuring of the outstanding loans was implemented through an amendment to the credit agreement.

Neuquén’s consent solicitations commenced on August 10, 2020, expired on November 24, 2020, and settled on November 27, 2020. Holders of 87.12% of the aggregate principal amount of the TICADE securities and holders of 93% of the aggregate principal amount of the TIDENEU notes delivered their respective consents to the proposed amendments, which became binding on all holders of all series of notes.

The amendment of the terms of the credit agreement became effective on December 4, 2020.

Through the restructuring, Neuquén obtained relief by way of a reprofiling of the current amortization schedule and reductions in the interest rates on the outstanding Notes and loans under the credit agreement. To permit the extension of the average life of the instruments, amendments were made to the package of oil and gas royalty payments comprised in the collateral package that secure payments under the TICADE securities and the credit agreement.

The relief sought by Neuquén through the restructuring of the notes and loans under the credit agreement had the primary goal of restoring debt sustainability levels in the light of current conditions and the expected long-lasting effects of the COVID-19 crisis on Argentina generally and on Neuquén’s economy in particular, as well as the measures undertaken by Neuquén to date to address such conditions.