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ARGENTINA | 26-02-2020 18:54

La Rioja Province late on bond payment, will seek talks with creditors

Authorities in La Rioja say province facing difficulties in making interest payments for US$300M in bonds due 2025 and plans to initiate consultations with bondholders.

La Rioja Province has become the latest Argentine borrower to miss a debt payment. Provincial authorities say they will move to open talks with creditors to renegotiate US$300 million in bonds.

Officials said the province is "doing its best" to meet original interest payments, due February 24, which fall within a 30-day grace period.

Nonetheless, La Rioja will push for negotiations with investors to put its "financial obligations on a sustainable path," officials stressed in a regulatory filing.

La Rioja is the third Argentine province to call for discussions with bondholders after a fall in the peso and an economic slowdown that threatened finances and access to world credit markets. Chubut and Buenos Aires Province are also facing debt payment problems.

President Alberto Fernández's administration has called for talks with private creditors and the International Monetary Fund about billions of dollars in federal debt.

"The Argentine economy faces challenges that have significantly deteriorated the capacity to pay the capital and interest on public debt," La Rioja said at an event. "The province is not exempt from the difficulties mentioned and, like the national government, it must face these limitations in a responsible manner.”

La Rioja's bonds, which mature in 2025, fell 0.26 cents to 46.05 cents on the dollar on Wednesday afternoon. They carry the so-called green bond designation because part of the proceeds were used to finance the Parque Arauco wind farm.

by Scott Squires, Bloomberg

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