Coalition of Argentine Provincial Bondholders

Who We Are

The Coalition of Argentine Provincial Bondholders (“CAPB”) was formed by a group of international asset managers with investments of over $3bn in bonds issued by Argentine provinces. The CAPB advocates on behalf of institutional and retail investors in the Argentine provincial bond market. We seek in particular to ensure that negotiations over debt restructurings in the market, where necessary, are carried out on a fair and principled basis. Failure to do so would put in jeopardy the future of this market, to the detriment of provinces and their residents.

The Argentine Provincial Bond Market

International capital markets have been an important component of financing capital expenditure programs of Argentina’s provinces. Provinces have accessed the market in order to improve infrastructure and expand the economic opportunities and quality of life of their inhabitants.

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In recent years, bond proceeds have, for example, financed the construction of solar farms, wind power projects, hydroelectric plants, electricity transmission infrastructure, highways, trunk gas pipelines, ports, hospitals, water and sewage projects and industrial parks. Overwhelmingly, provinces have managed their finances prudently. Debt ratios have remained low, and the repayment burdens associated with borrowings have been well-planned and sustainable.

What is at Stake?

Provincial finances in Argentina have been under pressure due principally to the sharp slowdown in economic activity as a result of the Covid-19 pandemic. As a consequence, the majority of provincial debt issuers have approached bondholders seeking payment relief. Unfortunately, in many cases, provinces have sought concessions from bondholders that go far beyond their actual needs.

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These requests appear to be driven by a mandate from the national government seeking to apply harsh terms to all creditors. Such actions are both illegitimate and manifestly not in the best long term interests of provinces themselves. Future access to international capital markets for Argentina’s provinces depends on fair treatment of creditors.

Our Basic Principles

The CAPB has issued a statement of Basic Principles that must govern any restructurings of provincial debt. These principles require that debt restructuring negotiations take place on the basis of transparency and good faith with non-interference by third parties, that restructurings be based on true needs of borrowers, that provinces commit to allocating a reasonable portion of fiscal capacity to debt service and that debt restructurings must be approached as a last resort in light of their long-term costs for provinces and their economies.

What We Do

The CAPB’s main aims are related to Information and Advocacy. We provide information, primarily via our website and Twitter account, to holders of Argentine provincial bonds.

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This includes re-broadcasting communications of creditor committees negotiating with individual provinces upon request as well as providing certain background documentation which may not be readily available to all bondholders. Information can be found under our news section and also on the individual provincial pages on our site. We also advocate on behalf of all holders of Argentine provincial bonds on matters of common interest. We seek to engage all stakeholders—provinces, multilateral organizations, underwriters and the Argentine national government—with the aim of ensuring that the long-term viability of the provincial bond market endures.

What We Do Not Do

The CAPB does not participate in bilateral debt negotiations with provincial borrowers. Restructuring negotiations are conducted by representatives of bondholders in each specific case. The CAPB will advocate, however, for its Basic Principles to be observed in all restructurings.