Argentina

Creditors of Argentine state-owned oil and gas company YPF are fighting for their rights after being asked to participate in a debt exchange that would cause them material losses. But even if bondholders rebuff what appears to be an opportunistic offer, the attempted deal is another bad omen for investors in Argentina.

A group of investors holding more than a quarter of YPF’s $6.228bn of outstanding international bonds have confirmed that they will not participate in the company’s exchange offer, but say they do not believe they need to take further steps, for now, to block the deal.

Holders of bonds issued by Argentine state oil and gas company YPF are seeking to form a creditor committee to block a proposed distressed debt exchange that analysts say is unlikely to gain much traction with creditors.

Argentine oil and gas company YPF has launched an exchange offer for all of its $6.228bn of outstanding international bonds, taking advantage of a new central bank rule that enables companies to issue bonds guaranteed by export receivables. The proposed exchange bonds would not pay interest until 2023, and Fitch said the deal qualifies as a distressed exchange under its criteria — even though investors will end up owning more bonds than they started with.

Latin America’s largest e-commerce company MercadoLibre and Mexican cement maker Cemex kept up the hectic conditions in the LatAm primary bond market on Thursday, with the huge order book on MercadoLibre’s inaugural bond issue the clearest indication of risk appetite among EM buyers.

Latin America’s largest e-commerce company, MercadoLibre, has mandated five banks ahead of a debut bond offering that will include one tranche of sustainable bonds.

Despite funding stresses in certain Latin American countries, bond markets will continue to help the region with its financing needs. For now, this eases the pressure for reform and fiscal consolidation, but issuers must eventually face up to political and social turbulence. Oliver West reports.

A group of bondholders holding more than half of the Argentine province of Córdoba’s international bonds took just one day to yet again reject the issuer’s attempt to amend terms on $1.67bn of bonds. As the countdown to default begins, creditors called for discussions “rooted in the realities of the province’s financial position and outlook”.

Argentina’s second largest provincial issuer, Córdoba, improved its consent solicitation to bondholders on Thursday, increasing proposed coupon payments. The offer comes as Argentine provincial debt talks gain momentum, but Córdoba is still some way off its bondholder group’s latest proposal — though the creditor committee has not yet reacted to the improved offer.

The Argentine Province of Río Negro on Tuesday launched a consent solicitation that has already earned the support of more than half of bondholders after it improved an initial restructuring offer. But analysts warned that Argentina’s deteriorating economy was forcing provinces to be less aggressive in renegotiating their obligations.

The Province of Neuquén has become the fourth Argentine regional or local government to wrap up a debt restructuring this year. But with most provincial issuers struggling to reach agreements with creditors, several provinces’ bondholders have joined forces to bolster their negotiating position. This may help bondholders force the provinces to offer deals that are better than those the national government wants both sides to make.

Marcelo Delmar, a veteran of Latin American bond markets, has joined Morgan Stanley’s debt capital markets team in New York, GlobalCapital understands.