Petroamazonas asks for extension

Petroamazonas asks for extension

Asset Management Bonds Debt Capital Markets Corporate & Sovereign Strategy Economy & Policy Fixed Income Funds Structured Finance Energy Gas Regulation Coronavirus Ecuador Andean Latin America

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Ecuador's Petroamazonas asked bondholders on Tuesday to accept deferred interest payments and delay the maturity date of its 2020 bonds for almost a year as the coronavirus pandemic and low oil prices ravage the local economy.

As part of the proposal, the state-owned oil company will make the next regularly-scheduled interest payment on April 6, but not pay interest after that until September 6. It will also lower the September interest payment by $0.50 for every $1,000 in principal, Petroamazonas said in a statement.

The company asked bondholders to delay the maturity date by almost a year to December 2021 and divide the remaining $175 million in outstanding principal payments into 12 monthly installments, it said.

Petroamazonas also asked that bondholders exclude from cross default 11 series of sovereign bonds with maturities from 2022 to 2035. The federal government, which backs Petroamazonas' notes, sought its own payment extensions earlier this month.

Petroamazonas sold $300 million worth of 4.625% 2020 notes to yield 7% with Citi as the sole bookrunner in November 2017. Citi is now managing the consent solicitation for Petroamazonas.

A group that holds roughly 60% of the outstanding 2020 notes, represented by White & Case, has already agreed to Petroamazonas proposal. The offer expires on May 4, the oil company said.