Pursuant to Communication “A” 7106 dated September 15, 2020, the Argentine Central Bank tightened currency controls.
According to the new regulation, private sector companies and financial institutions shall reprofile at least 60% of any payment of principal scheduled between October 15, 2020 and March 31, 2021 on any external financial debt (other than intercompany debt) and dollar-denominated local securities offerings.
A refinancing plan shall be filed with the Argentine Central Bank based on the following standards:
a) Argentine debtors shall be granted access to the foreign exchange market to purchase foreign currency to make payments of services of principal for up to 40% of the principal amount due on such period only; and
b) at least 60% of the principal amount due on such period shall be refinanced with a new external indebtedness with an average life of at least 2 years.
This shall not apply to: (a) indebtedness with international organizations or their associated agencies or guaranteed by them; (b) indebtedness granted by official credit agencies or guaranteed by them; or (c) payments of principal for an amount no exceeding USD 1,000,000 per calendar month.
The refinancing plan shall be filed before the following deadlines: (a) September 30, 2020, with respect any payment due before December 31, 2020; and (b) at least 30 calendar days before the relevant payment, with respect to any payment due between January 1, 2021 and March 31, 2021.
For more information, do not hesitate to contact Marcelo R. Tavarone, Federico Salim, Julieta De Ruggiero or Francisco Molina Portela.