An Argentine province defaulted on its debt; is a domino effect incoming?

In a statement, the province argued that it “faces limitations in its ability to pay principal and interest due on February 24, 2024, under the international bonds maturing in 2028” and therefore is “analyzing and evaluating the best way to address the management of its financial commitments.”

The province faced maturities of US$26.2 million that originally matured last Saturday.

The public debt issuance consists of a green bond issued in 2017 for US$200 million, with an annual interest rate of 9.75%.

The note signed by the Minister of Finance, Jorge Quintero, explained that La Rioja “faces unprecedented economic challenges”. These factors have significantly limited the province’s ability to honor its financial commitments, including the Bonds.

Given this financial situation, the province announced the hiring of financial and legal advisors and said it intends to “initiate consultations with the holders of the Bonds with the aim of reaching a friendly and consensus agreement with them as soon as possible”.

The Government of La Rioja argues that the Federal government accumulates with the province a total debt of $302.885 billion.