The Road to Recovery
The debt workout for Argentina's largest locally-owned private sector bank, mangled in the country's financial crisis, gives Banco Galicia room to breathe and rebuild its balance sheet.
With its 730 pages of documentation, the debt restructuring
of Banco de Galicia y Buenos Aires, Argentina's largest private
sector bank, stands as one of the most complex Latin American
debt workouts ever. More than 240 banks and other creditors,
including the US government and the Central Bank of Argentina,
agreed to participate in the $1.37 billion transaction. This
deal simultaneously restructured the bank's debts and helped
rebuild its balance sheet, devastated by the Argentine
The deal, which closed on May 18, comprised an initial
exchange of existing instruments for a new longer-term facility
with reduced interest rates, followed by subsequent exchanges
in which creditors could choose from a menu of options that
included combinations of debt and equity instruments, as well
as cash. The renegotiations involved lenders, who held $1.036
billion of debt plus accrued interest of debt, and bondholders,
who held $453 million plus...
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