Cartasur Cards S.A. entered the Public Offering Regime for Notes Issuance and issued Class I Notes for AR$ 75,000,000

Deal Counsel in the issuance of Class I Notes for AR$ 75,000,000, in which Banco de Servicios y Transacciones S.A. acted as arranger and placement agent, and Balanz Capital Valores S.A. and Puente Hnos S.A. acted as placement agents.

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“Presto Hoy I” Financial Trust for AR$ 95,107,765

Deal counsel in the constitution of the "Presto Hoy" Trust Securities Global Program and the issuance and placement in Argentina of trust securities for AR $ 95,107,765 issued under the “Presto Hoy I” Financial Trust, in which Wenance S.A acted as trustor and servicer, AdCap Securities Argentina S.A. as arranger, structuring agent, financial advisor and placement agent, and TMF Trust Company (Argentina) S.A acted as trustee.

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Bureaucracy Reduction in the Public Administration

On January 11th, Necessity and Urgency Decree No. 27/2018 (hereinafter, the “Decree”) was published on the Official Gazette. The Decree introduces a great number of amendments to current rules in order to reduce bureaucracy and simplify the procedures before the National Public Administration. The declared aim of the Decree is to promote investment, productivity, employment and social inclusion.

Decree´s main amendments

  • SENASA: Certain rules regarding food safety and quality service were abrogated in order to avoid duplicate regulation.
  • CORPORATIONS:

    • Digital Registries are established for account and corporation books as prescribed for Simplified Corporations (“SAS”, for its Spanish acronym)
    • Section 34 of Law No. 19,950 was replaced, forbidding the performance of a hidden or pretended partner. Joint liability of the pretended partner is also established.
    • The digitalization of Public Registries is also settled.
  • FONCDE: The object of the Development of Entrepreneur Capital Fund is modified, introducing the possibility to finance micro, small and medium companies.
  • ARGENTINEAN GUARANTEE FUND (FOGAR): this fund replaces the Micro, Small and Medium Company Guarantee Fund (FOGAPYME). FOGAR´s object is: (i) to grant guarantees on behalf of the ones issued by reciprocate guarantee corporations and (ii) offer direct and indirect guarantees in order to facilitate credit access for developers of economics or productivity activities.
  • EANASE: the National Air Transit Control Direction is dissolved and the Air Navigation Argentinean Company State Corporation is created under the National Ministry of Transport´s orbit, transferring the jurisdiction of the first to the latter.
  • ROAD SECURITY AND TRANSIT: The requirements that owners of vehicles destined to passenger and load transport need to comply with are amended. National Road Direction is assigned as the Enforcement Authority of road concession agreements.
  • TRADEMARK AND PATENTS: Trademark and patents’ registration procedure is amended and simplified, by the introduction of e-government systems.
  • RECIPROCATE GUARANTEE CORPORATIONS: It is strictly forbidden to grant guarantees higher than five per cent (5%) of the risk fund total value to one partner or third parties.
  • DIGITAL SIGNATURE: Electronic official documents digitally signed have the same effectiveness and probative value than their equivalents in paper format.
  • FOSSIL FUELS: the National Ministry of Energy and Mining is assigned as the Enforcement Authority of Hydrocarbons Law No. 17,319. Additionally, the Decree entitles the National Executive Branch to delegate certain powers to the Enforcement Authority.
  • GAS: Section 66 of Law No. 24,076 is amended, introducing the possibility to appeal the National Gas Regulatory Agency´s (ENARGAS, for its Spanish acronym) jurisdictional resolutions before the pertaining Federal Court of Appeal.
  • STATE´S PROPERTY ADMINISTRATION: Certain sections of Decree 1023/01 regarding public auctions as the Administration´s contracting procedure are amended. It is also foreseen the preferential application of public auction rather than direct contracting.
  • PUBLIC WORKS: Section 10 of Law No. 13,064 referred to public tenders´ publicity is amended.
  • SUSTENTABILITY GUARANTEE FUND: ANSES is now authorized to issue any financial and trading market operation allowed by regulatory authorities.
  • SECURITIES: Amendments are introduced regarding digital deliverance, endorsement, guarantee and acceptance of securities.
  • INSURANCES: Related to insurance agreement´s proof, amendments to Law No. 17,418 are introduced. Mandatory Collective Life Insurance Law No. 13,003 is abrogated prior issuance of a regulation regarding National Public Sector employee’s life insurance by National Insurance Superintendence.
  • PORTS: The authorization can now be granted by the pertaining Ministry, and not only by the Executive Branch. Regulations are issued in order to regularize the situation of existing ports and penalties are updated.
  • FINANCIAL INFORMATION UNIT: Certain sections of Law No. 25,246 are amended, settling new information obligations.
  • SOCIAL CAPITAL FUND: The idea of “extraordinary incomes” is included in the definition of “Annual Rent” settled by section 1 of Annex II of the Trust Agreement executed between the National State and FONCAP S.A. Additionally, Financial Services Secretariat is authorized to re-arrange the Trust Agreement.
  • PAINTINGS: Certain aspects related to the importation of paintings are amended.
  • METRIC SISTEM: The necessity to register in a specific registry is established.

Please, do not hesitate to contact us for further information

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Renewable Energy - Corporate PPA´s: New Regulation

On January 10th, Disposition No. 1-E/2018 (hereinafter, the “Regulation”) issued by the Renewable Energy Sub-Secretariat (“SSER”, for its Spanish acronym) was published in the Official Gazette. The Regulation sets guidelines regarding the registration of the renewable energy generation projects (the “Projects”) before the National Renewable Energies Project´s Registry (“RENPER” for its Spanish acronym) and priority dispatch.

The Main aspects of the Regulation are summarized below:

  1. Priority Dispatch

    • If priority dispatch requests exceed the available capacity, the tiebreak shall be done according to the energy generation factor and requested tax benefits
    • If the owner of the Project is awarded priority dispatch and fails to submit the guarantee, priority dispatch for the same Project cannot be requested for at least four (4) quarters
    • Priority dispatch can be requested for a part of the total capacity of the Project
    • The expansion of transmission capacity which provoked the congestion will extinguish priority dispatch
    • Priority dispatch for future expansions of transmission capacity is regulated
    • Priority dispatch for expansions of transmission capacity on behalf of the Owner of the Project is regulated
  2. Investment Reference Values (in USD/MW)
    Wind Energy 1.250.000
    Photovoltaic Solar Energy 850.000
    Biomass (combustion and gasification) 3.000.000
    Biogas 5.500.000
    Sanitary Landfill Biogas 2.500.000
    Small Hydro 3.000.000
  3. Maximum Amount of Tax Benefits (in USD/MW)
    Wind Energy 625.000
    Photovoltaic Solar Energy 425.000
    Biomass (combustion and gasification) 1.500.000
    Biogas 2.750.000
    Sanitary Landfill Biogas 1.250.000
    Small Hydro 1.500.000
  4. RENPER

    • The registration before the RENPER shall be done by a formal presentation before the Renewable Energy Sub-Secretariat, that will be replaced, in the future, by Distance Procedure Platform (“TAD”, for its Spanish acronym)
    • Projects who have qualified under Program RenovAr are exempted to submit the technical information and are entitled to request the Inclusion Certificate for the tax benefits approved by the pertaining RenovAr Round up to the maximum available value
    • Registration procedure, requests and compliance deadlines are regulated
    • The RENPER will be made public at the Ministry of Energy and Mining´s website

Do not hesitate to contact us for further information.

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Electric Energy: “Critical Project” status and Tax Benefit procedure

On January 2 the Ministry of Energy and Mining (hereinafter, the “MEyM”) and the Ministry of Production (hereinafter, the “MP” for its Spanish acronym), issued Joint Resolution No. 4-E/2017 (hereinafter, the “Resolution”), which introduced the applicable procedure so as to obtain a “Critical Project” status, in the terms of Section 34 of Law No. 26.422 (hereinafter, the “Law”).

Section 34 of the Law foresees an exemption from import duties, statistic rates and tax-checking duties with regards to new imported goods, which are destinated to infrastructure works related to: (i) generation, transportation and distribution of electric energy, (ii) oil and gas up-stream and down-stream; (iii) construction of oil processing plants and expansion of those already in use; and (iv) oil and gas transportation, storage and/or distribution.

The Resolution is applicable to owners of wind farm projects, which have been awarded with a PPA under RenovAr 1, 1.5, and Resolutions No. 202/2016 and 168/2017 issued by the MEyM.

Main aspects of the Resolution are summarized below:

  1. Beneficiaries

    As indicated above, the Resolution shall only apply to owners of wind farm projects that have executed a PPA within RenovAr 1, 1.5 and Resolutions 202/16 and 168 /2017. Thus, the application of the benefits contained therein is not applicable to those projects under RenovAr 2.

  2. Comprised Goods

    The benefits are only applicable in regards to wind turbine generators (equal or greater than 700 kW), with tariff code 8502.31.00, as per indicated in the respective inclusion certificate. In the event that these wind turbine generators –and is tariff code- was not contained in the inclusion certificate, the applicants may request the Sub-Secretariat of Renewable Energy its insertion thereto.

  3. Application of the tax benefit

    The beneficiaries will benefit of this tax benefit to the extent that the exempted goods are solely allocated to the wind farm projects mentioned above.

  4. Time frame

    The “Critical Project” status may be requested until January 31, of current 2018, whereby the importation of the wind turbines must be complied on or before December 31, 2019.

  5. Applicable procedure

    The procedure establishes, inter alia, the following steps that must be complied so as to obtain the “Critical Project” status: (i) a benefit request application must be submitted before the MEyM; (ii) the “Company Information” form must be attached to such request; (iii) legal representative’s faculties must be accredited, (iv) project individualization; (v) affidavit that the applicants are not included in any of the Subsections a) and d) of Section 12 of Law No. 26.360; (vi) incorporation of the applicable goods to the Inclusion Certificate request, if applicable; and (vii) compliance of Hazardous Waste Law No. 24.051 and Chemicals Components Law No. 24.040 affidavit.

    Once the requirements have been fulfilled, a first stage of analysis by CAMMESA is carried out, jointly with the Direction of Renewable Energies. If documentation and/or information is uncompleted or insufficient, these organisms may, an additional 10 day term is contained so as to comply with such requirements.

    The procedure concludes with a Resolution to be issued by Sub-Secretariat of Renewable Energy, which shall be notified to the applicant and informed to the MP and AFIP.

At TRS&M, as a leading Law Firm in the electricity sector, we are following these developments with great detail and are available to discuss any query regarding the above.

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Renewable Energy: Distributed Generation

On December the 27th, Law No. 27,424 regarding “Renewable Energy Distributed Generation Promotion Program” was published on the Official Gazette (hereinafter, the “Law”).

The Law declares distributed generation as national interest and establishes the legal and contractual conditions for the generation of renewable energy for users of the distribution grid for self-consumption and eventual delivery of surplus electricity to the network (the “Projects”).

Main aspects:

  1. Targeted Users
    • Users connected to the distribution grid are allowed to install the necessary equipment to generate distributed energy for a power capacity equivalent to the one contracted with the distribution company.
    • An authorization from the distribution company is requested.
    • Projects regarding the construction of national public buildings must include distributed generation systems from renewable resources.
    • An efficient energy system will be proposed for the existing public buildings.
  2. Connection Authorization
    • It shall be required to the distribution company.
    • Term for issuance: the same as established by the local regulation for the electricity meters.
    • It cannot be denied when the equipment has been certified.
    • The distribution company will technically asses the safety of the Project.
    • Once the Project is technically approved, the user-generator and the distribution company will execute an agreement.
    • Installation costs cannot exceed the costs for changing or installing electricity meters.
    • Penalties are established for distribution companies who do not comply with the terms established by the Law.
  3. Billing

    Every distribution company will compensate the generated electricity with the consumed electricity for each user, according to the following guidelines:

    • The user-generator shall be entitled to a special rate for the electricity delivered to the grid, according to the seasonal price.
    • The billing shall reflect the volume of required energy and the amount of the electricity delivered to the grid. The user shall pay the net result of those values.
    • Shall there be a surplus in favor of the user-generator, it will constitute a credit for future billings. If the credit is not cancelled, the user-generator can request such credit to the distribution company. The credits can be assigned between users interconnected to the same distribution company.
  4. Enforcement Authority

    The Law´s enforcement authority will be empowered to:

    • Issue technical and regulatory rules for the approval of the Project.
    • Issue technical rules and guidelines for interconnection authorizations to the grid.
    • Act as a trustor.
    • Fix the rate for the electricity delivered to the grid.
    • Settle the general guidelines for the agreements.
  5. FODIS

    The Law established the Renewable Energy Distributed Generation Fund (“FODIS” for its Spanish acronym).

    • Purpose: the use of the trust assets for the granting of loans, incentives, warranties, capital contributions and acquisitions of other financial instruments for the development of the Projects.
    • Parties: the enforcement authority will act as trustor and a public financial entity as the trustee. The owners of the Projects shall be the beneficiaries of the fund.
    • Trust Assets: (i) resources of the national budget that cannot be lower than the fifty per cent (50%) of the effective saving in fossil fuels due to the electricity generated by the Projects; (ii) principal and interest recovery of the granted financing; (iii) resources granted by multilateral agencies; and (iv) incomes earned from the issuance of fiduciary values.
    • Instruments: (i) provide funds and grant loans; (ii) partially credit or subsidize interest rate of granted loans; (iii) grant incentives; and (iv) finance the diffusion, investigation and development of activities related to the application of these technologies.
    • Exemption: The FODIS and the trustee will be exempted to pay national taxes for transactions related to the FODIS.
  6. Promotional Benefits
    • FODIS will established, for twelve (12) years, extendable for the same term, bonuses for the acquisition of the equipment as a promotional benefit.
    • The enforcement authority can establish a tax certificate for national taxes as a promotional benefit.
    • The enforcement authority will give priority for promotional benefits for national equipment.
    • A maximum cap for Tax Benefits of pesos two hundred million ($ 200,000,000) is expected for 2017 in order to be used as promotional benefits.
  7. FANSIGED
    • Finally, the Law established the “Promotion Regime for the National Manufacture of Systems, Equipment and Inputs related to Distributed Generation” (“FANSIFED” for its Spanish acronym) for a ten-year term, extendable for the same term.
    • The activities benefit from the Promotional Regimen are the investigation, design, investment in capital goods, production, certification and install services for distributed generation.
    • The incentives are: (i) tax certificates; (ii) income tax accelerated amortization; (iii) VAT anticipated reimbursement; (iv) access to finance with preferential rates; and (v) access to the Supplier Development Program.
    • Only micro, small and medium-sized enterprises can request promotional benefits.
    • A budget cap of pesos two hundred million ($ 200,000,000) to be assigned to promotional benefits for the current fiscal year is established.

At TRS&M, we are following these projects with great interest and are available to discuss any query regarding the above.

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Issuance of notes worth AR$ 3.6 billion in the aggregate by HSBC Bank Argentina S.A.

Acted as legal advisor to HSBC Bank Argentina S.A. (“HSBC”) in the issuance of: (i) Additional Class 5 Notes (re-opening of Class 5 Notes issued August 4, 2017 at 101% issue price) worth AR$ 1,167,500,000 (US$ 65.94 million) at the Tasa de Política Monetaria (Monetary Policy Interest Rate) as determined by the Argentine Central Bank, at 104.5% issue price, due on August 4, 2020; (ii) Class 6 Notes worth AR$ 433,333,000 (US$ 24.44 million) at a 25% fixed annual interest rate, due on June 7, 2019; and (iii) Class 7 Notes worth AR$ 2,064,500,000 (US$ 111.92 million) at the TM20 interest rate as reported by the Argentine Central Bank plus a 3.5% margin, due on December 7, 2020.

Additional Class 5 Notes, Class 6 Notes and Class 7 Notes were issued under HSBC’s notes program for the issuance of non-convertible negotiable obligations for up to V/N US$ 500,000,000 (or its equivalent in other currencies).

HSBC and Banco de Galicia and Buenos Aires S.A. acted as placement agents of Additional Class 5 Notes and Class 7 Notes, while HSBC was the exclusive placement agent of Class 6 Notes.

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Banco de la Provincia de Córdoba made its first issuance of notes

Counsel to Banco de la Provincia de Córdoba S.A. in the issuance of Series I and II of the Notes for an aggregate amount of U$S 50,000,000.

Banco de la Provincia de Córdoba S.A. and Banco de Galicia y Buenos Aires S.A. acted as lead arrangers and placement agents, and Industrial Valores S.A. and TPCG Valores S.A. acted as placement agents, in the issuance of the Notes.

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Public-Private Partnership Agreements. Preliminary Bidding Terms of the National and International Tender: “Highways and Safe Roads Network– Stage 1”

The Undersecretariat of Public-Private Partnership (the “UPPP”) published on its website an executive summary and the main aspects of the Public-Private Partnership Program (“PPP”) related to “Highways and Safe Roads Network– Stage 1” (the “Project”) and preliminary draft of the bidding terms and conditions (the “Preliminary Bidding Terms”).

This implies the first implementation of PPP under Law No. 27,328 –approved on November 16th, 2016- and it Regulatory Decree No. 118/2017 –issued on February 17th, 2017- which implies an alternative regime to Public Works Act (Law No. 13,064) and Public Works Concession Act (Law No. 17,520).

Public hearings are to be held for informative purposes on January the 8th, 10th and 12th in the City of Buenos Aires, Buenos Aires, Santa Fe and Córdoba. Prior registration is requested and can be done in the UPP´s website.

The Project implies an investment of 6 billion USD and the execution of approximately 3,000 kilometers of national highways.

The tender will result in the awarding of PPP agreement (the “PPP Agreement”) to be executed with the National Directorate of Roads and Highways (“DNV” for its Spanish acronym) for a fifteen year-term.

On December 21st, 2017, a draft of the PPA Agreement (“Preliminary Agreement”) was published on DNV´s website.


Main aspects of the Preliminary Bidding Terms and PPA Agreement

Both the Preliminary Bidding Terms and Preliminary PPA are subject to amendments to reflect suggestions that will arise on the public hearings.

Highways and Safe Roads Network included in the Project

The Project consists on the execution of five (5) Highways and Safe Roads (the “Highways”):

  • “A” NATIONAL HIGHWAY: includes parts of National Routes No 3 and 226 (706 kilometers)
  • “B” NATIONAL HIGHWAY: includes parts of National Route No 5 (538,65 kilometers).
  • “C” NATIONAL HIGHWAY: includes parts of National Routes No 7 and 33 (875,92 kilometers)
  • “E” NATIONAL HIGHWAY: includes parts of National Routes No 9, 193, 34, A012, A008 and 11 (389,41 kilometers)
  • “F” NATIONAL HIGHWAY: includes parts of National Routes No 9 and 33 (634,99 kilometers)
  • “SOUTH” NATIONAL HIGHWAY: includes parts of National Routes Riccheri Highway, Ezeiza-Cañuelas Highway, No. 205 and 3 (298,63 kilometers)

Structure:

The awarding includes:

  • The design, construction, rehabilitation and improvement of the Highways (the "Main Works") and
  • Its operation and maintenance (the “Main Services”)

The compensation for the execution of each work will be divided in order to mitigate the construction, rehabilitation and improvement risk of the Main Works.

The Preliminary Bidding Terms include the possibility to execute additional mandatory works –in terms of section 9, 1) of Law No. 27,328- (the “Additional Mandatory Works”) and additional voluntary works (“Additional Voluntary Works” together with the Additional Mandatory Works, the “PPP Contracting Party´s Works”).


Main aspects of the Preliminary Bidding Terms

  • Prequalification requirements – Strategic Partner
    Each bidder will be required to meet certain specific technical prequalification requirements, including submission of proof of having experience in the construction of road projects and/or operation of road concessions or other PPP infrastructure projects.

    Furthermore, each bidder must designate a strategic shareholder (“Strategic Partner”), which will be required to meet certain minimum solvency prequalification requirements and to maintain a minimum level of shareholding in the PPP Contractor of 30% until at least (i) 20% of the PPP Agreements has been executed or (ii) 20% of the committed investment has been made.

  • Tender process
    The PPA Agreement awarding will be subject to a multiple-stage tender process. The Ministry of Transport will call for the Tender and it will conducted with the UPPP.

    Laws No. 13,064, 17,520, its amendments and Decree No. 1023/01, its amendments will not apply to the Tender.

  • Limitations to the awarding: each bidder can only be awarded with a maximum of two (2) Highways.
  • National Component: bid submission will imply a commitment to execute the PPP Contracting Party’s Works with, at least, thirty three per cent (33%) of national component.
  • Bonds: each bidder will be required to submit a Bid Bond and, on the date of execution of the PPP Agreement, a Financial Close Bond. If the Bidder is composed by two (2) or more natural persons or legal entities, the Bid Bond shall be issued in name of the Financial Strategic Partner.

    PPP Contractor shall also submit the following bonds: (i) Main Works Performance Bond; (ii) Additional Mandatory Works Performance Bond; and (iii) Main Services Performance Bond (the “Compliance Bonds”).

  • Incorporation of the PPP Contractor:
    - Awarded bidders must incorporate, prior to the execution of the PPP Agreement, the PPP Contractor as a Corporation. Its minimum capital share will be determined by the competent authority. A breach will imply: (i) execution of the Bid Bond and (ii) an awarding of the PPP Agreement to the following bidder in merit list.
    - If one Bidder is awarded with two (2) Highways, a Corporation for each Highway must be incorporated.
  • PPP Agreement:
    - It shall be executed within ten (10) days from the awarding, term that can be extended by the Ministry of Transport.
    - It will have a fifteen-year- term.
    - Financial Close must be achieved within six (6) months from execution. Such deadline can be extended (i) three (3) months, prior to an increase of the Financial Close Bond of fifty basic points (50 bsp); and (ii) six (6) months, prior to an increase of the Financial Close Bond of one hundred basic points (100 bsp).
    - To achieve Financial Close, the PPP Contractor shall be required to submit proof of funds availability for an amount equal to the Main Works specified in the PPP Agreement. This can be through the capitalization of the PPP Contractor or a commitment issued by a financial institution. If financing will be achieved by loans, the entity providing such loans will be required to meet certain minimum credit requirements.
    - The PPP Contractor shall be required to submit proof that its shareholders have made equity contributions for, at least, ten per cent (10%) of the amount of the Main Works (“Equity Contributions”). Such Equity Contributions can be made by instalments, but no later than the date specified therefor in a schedule to be established in the PPP Agreement. If this is option is taken, the shareholders or affiliated entity shall satisfy certain financial solvency requirements.
  • Main Works’ Compensation
    - The Main Works´ Compensation shall consist on the delivery to the PPP Contractor of one or more Investment Payment Tittles (“TPI”, for its acronym in Spanish), after the compliance of works milestones.
    - The PPP Trust shall issue, every three months, one or more TPIs, in US Dollars, which will be unconditional, irrevocable and freely transferable. Each TPI shall provide for twenty (20) semi-annual payments in US Dollars and the interest rate for delayed payments. PPP Contractor can choose between fixed and unconditional TPI or a combination of fixed TBIs and variable and conditional TBIs.
  • Main Services Compensation
    - As compensation for the provision of Main Services, the PPP Contractor shall receive: (i) the incomes obtained from tolls, excess load charges and commercial exploitation of the Highway ("Compensation by Users"), and (ii) the compensation for infrastructure availability (the "Availability Compensation"), through monthly issuance and delivery of Availability Payment Titles (“TPD” for its Spanish acronym) to the PPP Contractor.
    - The TPDs shall be unconditional, irrevocable and freely transferable. The TPDs shall be issued by the PPP Trust, prior discount of applicable penalties. Interest rates for delay payment will be established.
    - Each TPD will provide for a single cash payment in Argentine Pesos, to be made within 15 business days from the date of its issuance
  • PPP Trust:
    - The parties to the PPP trust agreement ("PPP Trust Agreement") will be the Republic of Argentina, as trustor, a financial entity to be selected, as trustee, and each PPP Contractor, as beneficiary.
    - The PPP Trust will be solely destined to administrate cash flows allocated to make all payments related to the Projects, by the issuance of TPI and TPD at the contracting entity´s request.
    - The PPP Trust will have one or more collection accounts shared by all Projects. Each Project will also have individual accounts waterfall, which will be segregated from the accounts related to other Projects.
    - The PPP Trust shall be funded with (i) amounts corresponding to diesel fuel taxes allocated to the “Sistema Vial Integrado” (“SISVIAL”, for its Spanish acronym); and (ii) the PPP Contractor´s monthly payment to the PPP Trust (“Traffic Contributions”). The National Estate will be required to make one or more contingent contributions each year for the necessary amount to cover funding shortfalls in the PPP Trust.
    - Each PPP Contractor shall execute an adhesion agreement to the PPP Trust, in order to become the beneficiary.
  • Other relevant aspects
    - A specific treatment of certain risks is settled in order to ensure the economical-financial equilibrium along the term of the PPP Agreement. For instance, under some conditions, the PPP Contractor shall request adjustments to the PPP Agreement term or the Availability Compensation.
    - Related to the rate-exchange risk, PPP Contractors may enter into a currency collar agreement with the PPP Trust, which will remain in force during the construction period of the Main Works. The currency collar will establish a ten per cent (10%) band between the US Dollar and the “Unidad de Valor Adquisitivo” ("UVA"), published by Argentinean Central Bank at the time of the awarding.
    - Early termination of the PPP Agreement will not affect payment to be made under any Fixed TPIs or TPDs issued prior to the termination date. In addition, payment of undepreciated investment is established.
    - The PPP Agreement shall provide typical protections for secured creditors, such as step-in rights or cure periods, among others.
    - Regarding dispute resolution mechanism, the PPP Agreement shall provide for an initial stage for technical or financial matters, to be submitted to a technical board. A second stage of arbitration in established, to be settled in the Republic of Argentina or in any other jurisdiction.

This Project provides answers to the strong expectations that have been in place regarding the sanction of PPP´s Act, introducing a favorable opportunity for the development of new infrastructure under this new regime that presents specific modulations, different from traditional mechanisms as Public Works and Public Works Concession.

At TRS&M, we are following these matters with great interest and are available to discuss any query regarding the above.

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Province of La Rioja’s Debt Securities Issuance for US$ 100 million aggregate principal amount

Argentine law counsel to the initial purchaser and the local placement agents in the issuance of US$ 100 million aggregate principal amount of 9.750% additional notes due 2025 (the “Notes”). The Notes were offered and sold in transactions exempt from registration in reliance upon Rule 144A and Regulation S of the United States Securities Act of 1933, as amended, and were admitted to listing in Mercado de Valores de Buenos Aires S.A. and to be traded in Mercado Abierto Electrónico S.A.

UBS Securities LLC acted as initial purchaser in connection with the issuance of the additional Notes. Banco Voii S.A. and Puente Hnos. S.A. acted as local placement agents. The Bank of New York Mellon acted as trustee, paying agent and transfer agent. The Bank of New York Mellon (Luxembourg) S.A. acted as Luxembourg listing agent, paying agent and Luxembourg transfer agent.

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