Argentina’s YPF bonds rally after partial debt swap

RIO DE JANEIRO, BRAZIL – YPF bonds rallied on Thursday, February 11th, after the Argentine state energy giant said it had received support from holders of almost 60% of its bonds maturing next month to restructure the debt, helping defuse near-term default fears.

The company, which leads development of the huge Vaca Muerta shale formation in the South American nation, said the result meant it had received support from the Central Bank to get access to the dollars it needed to pay off its obligations.

YPF said in a statement it had support from 59.79% of holders of the 2021 bond, which was in focus ahead of a US$413 million payment due next month it was struggling to pay because the central bank has tightened access to foreign exchange.

YPF shares rose 1.8% in New York and fell 1.8% in Buenos Aires, while most of its bonds involved in the restructuring plan rallied to close the day. The March 2021 bond rose 4 cents, while the 2025 and 2027 rose about 3.8 cents each, according to Refinitiv data.

Support for the other six bonds in the planned larger US$6.2 billion restructuring was substantially lower, at between around 19%-43% for the notes expiring between 2024-2047, after leading creditor groups withheld support of revamping those notes.

“YPF reached a participation level of the short-term bond of 60% and of the bonds overall close to 32%,” a company source told Reuters, adding this would result in the issuance of 2026, 2029 and 2033 notes of around US$2.1 billion.

The source, speaking on condition of anonymity, said the revamp meant the company had received the central bank’s go-ahead to access the dollars it would need to pay off its commitments, as well as “freeing up resources for productive investments”.

A spokesman for Argentina’s central bank (BCRA) told Reuters that “owing to the successful debt restructuring within BCRA regulations, today YPF will be able to access the official market to make payments on their maturities.”

Argentina, in a recession since 2018, has imposed strict capital controls as it battles against falling reserves and looks to protect the local currency.

The Ad Hoc creditor group, which includes investors like BlackRock, celebrated the agreement on the 2021 bonds.

“The Group will be available to engage with YPF again should it become necessary in a good faith process,” it said in a statement on Thursday.