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UncategorizedBruchou advised YPF in the largest corporate liability management exercise in the history of Argentina

March 3, 2021
Banking & Capital Markets
Debt Capital Markets
Oil and Gas

 

YPF S.A. (“YPF”), an Argentine company with leading market positions across the domestic upstream, downstream and gas and power segments, successfully concluded a liability management transaction which consisted in the issuance of its US$775,782,279 4.000%/9.000% Step Up Senior Secured and Export-Backed Notes due 2026 Series XVI (the “Series XVI Notes”), US$747,833,257 2.500%/9.000% Step Up Senior Notes due 2029 Series XVII (the “Series XVII Notes”) and US$575,649,021 1.500%/7.000% Step Up Senior Notes due 2033 Series XVIII (the “Series XVIII Notes”, and collectively with the Series XVI Notes and the Series XVII Notes, the “New Notes”). The transaction was launched on January 7, 2021, the early settlement for the 2021 Old Notes Series XLVII and the settlement for all other series of Old Notes (as defined below) took place on February 12, 2021 and the late settlement for the 2021 Old Notes Series XLVII took place on March 1, 2021.

The Series XVI Notes will benefit from the following collateral: (i) assignment of export receivables of certain exportable products and (ii) the pledge over 50% of the shares of YPF Energía Eléctrica S.A., subsidiary of YPF and one of the most important players in the energy sector in Argentina.

The New Notes were issued in an international exchange offer in exchange for YPF’s outstanding 2021 Old Notes Series XLVII, 2024 Old Notes Series XXVIII, March 2025 Old Notes Series XIII, July 2025 Old Notes Series XXXIX, 2027 Old Notes Series LII, 2029 Old Notes Series I, 2047 Old Notes Series LIV (the “Old Notes”). The transaction also involved a consent solicitation to ratify certain proposed amendments to the terms and conditions of the Old Notes. The outstanding amount subject to exchange was approximately US$6.2 billion in 7 series of Notes, which makes this liability management transaction the biggest corporate exchange offer and consent solicitation transaction in the history of Argentina.

The purpose of the exchange offers was to extend the average life of the debt obligations associated with the Old Notes, provide the company with relief with respect to cash payments under its outstanding foreign currency denominated financial debt through 2022 and, in the case of the exchange offer applicable to the 2021 Old Notes Series XLVII, to comply with Communication “A” 7106 of the Central Bank.

Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Itau BBA USA Securities, Inc. and Santander Investment Securities Inc. acted as dealer managers, Banco Itaú Argentina S.A., Itaú Valores S.A., Banco Santander Río S.A. and HSBC Bank Argentina S.A. acted as local placement agents, Citibank NA, acted as offshore collateral agent, La Sucursal de Citibank NA, establecida en la República Argentina, acted as onshore collateral agent, y TMF Trust Company (Argentina) S.A., acted as consent agent in Argentina.

The Bank of New York Mellon acted as indenture trustee.

Counsel to YPF S.A.

Bruchou, Fernández Madero & Lombardi acted as counsel to YPF through partners Bruzone, Hugo N. L.Bazán, José María and Rodríguez Galli, Javier S. and associates Belusci, Leandro Exequiel, Gallo, Sofía and Dorado, Lucila.

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