Clifford Chance

Clifford Chance advises Argentine infrastructure company CLISA on innovative notes liability management transaction

Clifford Chance advised CLISA - Compañía Latinoamericana de Infraestructura y Servicios S.A. ("CLISA"), in connection with its (i) offer to exchange (the "Exchange Offer") any and all of its US$300 million 9.5% Senior Notes due 2023 (the "Old Notes") for 9.5% Senior Secured Notes due 2023 (the "New Notes"), and (ii) related consent solicitation (the "Consent Solicitation" and, together with the Exchange Offer, the "Offer"), according to which it solicited from holders of Old Notes consents to certain proposed amendments to the terms and conditions of the Old Notes. The New Notes, which are secured by a first priority share pledge over common shares of CLISA's subsidiary Tecsan Ingeniería Ambiental S.A., include an option for CLISA to pay interest due for the interest periods ending on or prior to January 20, 2021 in kind, in which case (i) interest will accrue at a rate of 11.50% per year for the periods and for the portion of interest with regards to which the election is made by CLISA and (ii) CLISA will issue to each holder of New Notes additional New Notes in a principal amount equal to the accrued interest on such holder’s then outstanding New Notes and due on such interest payment date (the “PIK Option”). The New Notes were listed on (i) the Global Exchange Market, which is the exchange regulated market of Euronext Dublin and (ii) the Bolsas y Mercados Argentinos S.A. through the Buenos Aires Stock Exchange (Bolsa de Comercio de Buenos Aires), and trade on the Mercado Abierto Electrónico S.A.

The Offer was subject to a minimum participation condition of 80% of the aggregate principal amount of Old Notes. Holders of US$270,040,000 in aggregate principal amount of the Old Notes, or approximately 90.01% of the Old Notes, validly tendered for exchange pursuant to the Exchange Offer and delivered consents to the proposed amendments pursuant to the Consent Solicitation. As a result, CLISA issued US$270,040,000 in aggregate principal amount of New Notes and US$29,960,000 in aggregate principal amount of Old Notes remain outstanding.

This innovative transaction, including the PIK Option, will allow CLISA to preserve liquidity and improve its financial position through 2021 in the face of economic uncertainty. The transaction, announced in December 2019 and closed in January 2020, was the first liability management transaction in the international debt capital markets by an Argentine corporate since the new administration took office in December 2019 following the presidential elections.

CLISA is a leading Argentine infrastructure manager and developer with over 110 years of experience and a current focus on construction, waste management, transportation and water supply services.

The Clifford Chance team was led by Capital Markets partners Hugo Triaca and Jon Zonis and included associate Lane Feler and foreign law clerk Giancarlo Reanda. Tax partner Avrohom Gelber assisted on the tax aspects of the transaction.

Clifford Chance has been recognized for decades as a preeminent law firm in Latin America. The Firm has led the way in developing successful, novel financing structures for a diverse client-base, and is constantly innovating its service offering, such as with a dedicated Latin America group specialized in capital markets, bank and project financing structures representing initial purchasers, underwriters, issuers and investors. The Firm's lawyers have extensive experience in the region's distinct business, legal and regulatory landscapes. They provide expertise that cuts across a full range of relevant practices, while aligning pioneering solutions with the unique characteristics of the Latin American market and the changing needs of clients.