The province governed by Ricardo Quintela alluded to economic difficulties due to high inflation, the December devaluation and the fiscal adjustment that cut transfers from the Nation.
In the middle of conflict between the Executive Branch and the governors due to the cut to provincial funds, the Province of La Rioja announced to its bondholders that it will not be able to pay this Monday the 26 million dollars of maturities it faced in foreign currency. For this reason, it will open a round of “consultations with bondholders with the aim of reaching an amicable and consensual agreement with them in the shortest time possible.”
The province that governs Ricardo Quintela He alluded to the fact that the economic difficulties due to high inflation, the December devaluation and the fiscal adjustment that cut the transfers from Nation to the provinces complicated their payment possibilities.
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“The Province is analyzing and evaluating the best way to Address managing your financial commitments. The Province faces unprecedented economic challenges. The contraction of the Argentine economy, high inflation and the devaluation of the exchange rate have had a direct effect on the economy of the Province, resulting in a serious decline in tax collection at the provincial level,” he stated.
“The province has hired financial and legal advisors and intends to initiate consultations with Bondholders with the aim of reaching a friendly and consensual agreement with them in the shortest time possible. Additionally, subject to the result of preliminary conversations with investors, the Province will make its best efforts to pay in the shortest possible time the amount of interest owed as of February 24, 2024,” the province continued in a statement signed by the Rioja finance minister. Jorge Quintero.
Strictly speaking, the expirations, for US$26,270,264 They had the payment date of February 24, which was a Saturday. As it is an international bonus, its payment date is moved to the previous business day, so it should have been paid last Friday. It’s about a dollar bond issued in 2017 when the country still had open international debt markets. It was an issuance of a green bond, for US$200 millionwith an interest rate of 9.75% annually.
La Rioja, in this way, is the first province that manifests financial problems to meet the maturities of its debt. The cut to discretionary transfers added to the drop in co-participation generated pressure on the provinces’ accounts.
Source: Ambito
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