YPF confident debt swap will clear near-term default risk, source says

  • 2/10/2021
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BUENOS AIRES, Feb 10 (Reuters) - Argentina state energy company YPF expects to win high take-up from creditors in a bond restructuring of its 2021 notes, on which it faces a $413 million payment next month, which would clear at least its short-term default risk. The broader $6.2 billion debt offer, which includes seven bond series, expires on Wednesday, with some key creditor groups already saying they will support the revamp of the urgent 2021 bond, but that they may not tender their debt in others. “The central swap was the 2021 bond, which was the company’s goal,” an industry source with direct knowledge of the operation told Reuters, adding that big names like BlackRock, Fidelity and others were all on board for that particular bond. “The risk that the company had of not being able to pay that bond is already overcome.” The person said YPF was still trying to convince more creditors, but that with “the rest of the bonds, it is important to see if the maturity curve can be improved and money released for investments.” YPF, which leads development of Argentina’s huge Vaca Muerta shale formation, has struggled to access the dollars it needs to meet its March payment owing to restrictions on accessing foreign currency set by the central bank. Argentina, in its third year of recession, has imposed strict capital controls as it battles against falling reserves and looks to protect the local peso currency. Reuters reported this week, citing a creditor source, that while the major Ad Hoc group would support the 2021 bond revamp, it was not willing to take part in the other six series that expire between 2024 and 2047. Since the start of February, YPF shares have gained between 17% and 19% on rising hopes it could avoid default. (Reporting by Jorge Otaola; Writing by Adam Jourdan Editing by Paul Simao)

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