Argentina’s state-run shale driller faces debt deadline

By Scott Squires and Jonathan Gilbert on 2/3/2021

(Bloomberg) --Creditors of Argentina’s state-run oil company, YPF SA, are sending mixed signals as one group of bondholders rejected the company’s latest debt restructuring plan while another voiced support.

The YPF Ad Hoc Bondholder Group, which says it holds 45% of YPF’s bonds maturing in March, said it wouldn’t tender its bonds in the company’s $6.2 billion debt swap, according to an emailed statement from Clifford Chance LLP, one of the group’s legal advisers. A second committee of creditors, led by law firms Dechert LLP and DLA Piper, said it supported the company’s latest amendments to its debt offer, which expires Friday at 11:59 pm in New York. This second group says it holds 25% of YPF’s debt across the company’s seven bonds, according to a separate statement.

Bondholders have until Friday to accept YPF’s proposal to exchange $6.2 billion of existing debt for three new bonds and a cash sweetener. On Monday, the company amended its offer for the third time, proposing to its creditors a larger upfront cash payment as an incentive to attract more support for the swap.

The offer “represents an improvement on previous terms announced by the company, but fails to provide a balanced solution, including appropriate treatment for the bonds maturing on March 23, 2021,” according to the statement from the group led by Clifford Chance. The group also said it submitted a counterproposal to YPF that would provide “interest savings over the next several years with below-market interest rates.”

The committee, which was previously advised by White & Case LLP, hopes to continue negotiating with the company, it added.

Meanwhile, the group led by Dechert and DLA Piper said the improved terms were “worthy of serious consideration by the holders of the 2021 notes,” and that large holders of the 2021 bonds, both within the so-called Dechert Group and outside it, plan to enter into the swap.

YPF jolted bondholders last month by announcing the debt restructuring after Argentina’s central bank said it wouldn’t give the company the dollars it needed to make the $413 million bond payment due in March. YPF’s debt restructuring plans are designed to free up cash the company can use to boost production in the shale-rich region of Vaca Muerta in Patagonia.

The company wants to get the restructuring done by Feb. 12, the last day that auditors can use the company’s balance sheet to approve market operations. After that date, YPF would have to wait until it reports earnings in early March to be able to agree to a deal.

YPF’s U.S.-traded shares fell as much as 3.5% on Tuesday. Its bonds maturing in 2021 were little changed, edging up less than a cent as of 3:22 pm in New York.

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