Petroamazonas gets extension

Petroamazonas gets 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 US

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Petroamazonas, one of two state-owned oil companies in Ecuador, said that creditors agreed to accept late interest payments and put off the maturity date of its 2020 bonds by almost a year.

The company needed consent from holders of at least 75% of the $175 million in outstanding 4.625% 2020 notes to get the extension. In the end, investors with 98.9% of the notes agreed to the proposal, Petroamazonas said in a statement on Monday.

A group that holds roughly 60% of the outstanding 2020 notes, represented by White & Case, had already agreed to the proposal when Petroamazonas announced it on April 28.

In the agreement, the state-owned oil company will make the next interest payment on April 6, but then it will not pay interest until September 6. It will also lower the September interest payment by $0.50 for every $1,000 in principal.

The company will also delay the maturity date on the 2020 notes by almost a year to December 2021 and divide the remaining $175 million in principal payments into 12 monthly installments.

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

The central government, which backs Petroamazonas' notes, sought its own payment extensions in mid-April. Over the weekend, the government lined up $643 million in emergency financing from the International Monetary Fund (IMF) to lessen the economic impact of the coronavirus outbreak and the plunge in oil prices.