CÓRDOBA.- Almost two months after announcing the decision to issue quasi-currencies, the Riojan governor Ricardo Quintela reported that he cannot pay his debt. The decision is known amid the tension between President Javier Milei and the provinces. La Rioja had to pay this Monday US$26.2 million due to the expiration of a bond in foreign currency that was issued in 2017.
This is a “green” bond, for a total of US$200 million, with 9.75% annual nominal rate. In February 2017, RIF25 securities were issued for US$200 million, in order to finance the Wind Farm; In August of that same year, they joined Additional US$100 million.
The Ministry of Finance of the province announced this Monday: “The government of the province of La Rioja reports that the Province faces limitations on your ability to pay principal and interest with a payment date of February 24, 2024 under the international bonds maturing in 2028 (the Bonds).”
He added that the province “faces unprecedented economic challenges because “the contraction of the Argentine economy, high inflation and the devaluation of the exchange rate “They have had a direct effect on the economy of the Province, resulting in a serious decrease in tax collection at the provincial level.”
He also stated that the provincial government “has not received co-participating funds, as established in Art. 83 of Law 27.70, making the Province’s income insufficient to cover expenses related to essential services and programs”, which has limited the ability to “honor its financial commitments, including bonuses ”. La Rioja appeared before the Supreme Court of Justice to claim these resources
“In light of the above, the Province has hired financial and legal advisors and intends to initiate consultations with the holders of the Bonds with the objective of reaching an agreement. friendly and consensual agreement with them in the shortest possible time,” maintains the statement that ends by indicating that, “additionally, subject to the result of preliminary conversations with investors, the Province will do its best efforts to pay in the shortest possible time the appropriate interest amount as of February 24, 2024″.
President Milei and Quintela have several crosses. The Riojan claims a debt of $9.3 billion. “The truth is that the governor receives what he has to receive [en materia de coparticipación y transferencias]. We don’t keep anyone’s money. If you spend money hiring Lali Espósito and then don’t pay the police, it’s not our problem“Milei said on Radio Miter, in relation to the situation in La Rioja.
Background
This bond already had problems; The payment of interest services began in August 2017, and the first six were paid in a timely manner; in August 2020 La Rioja reported that it would not make the payment, and took advantage of the 30-day grace period to begin negotiations to restructure the title. It ended in default. In April 2021 members of the ad hoc group of La Rioja Bondholders sued the province in the New York Courts and accused the Rioja authorities of “bad faith.” He August 25, 2021 there was an agreement.
Themes
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