YPF avoids March default with 60% support for key bond swap

Argentina’s state-owned oil company, YPF SA, said Thursday it had swapped almost 60 percent of a key bond due in March, saving the company millions of dollars in debt payments and avoiding a costly default next month.

Holders of a total 59.8 percent of a US$413-million bond due in March said they would exchange their notes in the swap, according to a company statement. Argentina’s largest energy company also won support from 43 percent of creditors to exchange its 2024 notes, and 37 percent of holders of one of its securities maturing in 2025.

YPF also said the Central Bank approved the results of the offer, and would allow it access to the foreign exchange market to repay any 2021 notes that aren’t swapped, according to the statement.

The exchange will grant YPF about US$630 million of debt relief through 2022, according to people at the company with knowledge of the matter.

The firm needed support from more than 50 percent of holders of the March 2021 notes – the most pressing maturity – in order to move forward with the exchange, which YPF said it couldn’t pay.

The company and its creditors have been negotiating for weeks, including four amendments to the original offer, after the company surprised bondholders in January by announcing a plan to restructure US$6.2 billion of debt.

YPF launched the debt exchange after the Central Bank denied the company access to the dollars it needed earlier this year to make the full March payment.