mirror price – 12005B http://www.12005b.info/ Wed, 25 Aug 2021 11:05:54 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 Private equity attacks its own medicine in controversial debt battles http://www.12005b.info/private-equity-attacks-its-own-medicine-in-controversial-debt-battles/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/private-equity-attacks-its-own-medicine-in-controversial-debt-battles/ The barbarians are crying scandal. For decades, private equity firms have been viewed as aggressive intruders, using sophisticated practices to prevail in brutal corporate competitions. Now this is reversed. In a wave of corporate restructurings following the coronavirus crisis, Apollo Global Management and other traditional private equity groups have taken to the courts to complain […]]]>


The barbarians are crying scandal. For decades, private equity firms have been viewed as aggressive intruders, using sophisticated practices to prevail in brutal corporate competitions.

Now this is reversed. In a wave of corporate restructurings following the coronavirus crisis, Apollo Global Management and other traditional private equity groups have taken to the courts to complain about the behavior of rival creditors.

It has not gone unnoticed that the legally aggressive tactics they challenge are those they themselves have deployed in the past.

Seeking new funds to weather the pandemic, mattress company Serta Simmons Bedding has taken $ 200 million in new loans a small majority of creditors who, in addition to putting in new money, have seen their existing loans rise to seniority in the capital structure. Holders of the remaining 49 percent of Serta’s loans, including Apollo, effectively saw their claim on the company’s assets become subordinate to senior debt holders.

Apollo sued, alongside other disgruntled creditors including Angelo Gordon and Gamut Capital. In a scathing response, Serta, owned by private equity group Advent International, noted that the plaintiffs had “sponsored and participated in numerous transactions structured in a manner similar to this transaction.”

A New York judge denied Apollo’s attempt to stop the deal.

Hot spots are multiplying and multiplying, as the pandemic pushes highly leveraged companies to the brink. Earlier this month, struggling movie channel AMC Theaters announced a rescue funding led by Silver Lake Partners, the private equity firm that already owns $ 600 million in AMC convertible bonds. A group of leading lenders, including Apollo, opposed the new financing and made their own competing proposal, believing the Silver Lake package to be inferior for AMC and undermining their own claims on the chain.

Apollo was also part of a group of creditors calling for an independent “reviewer” to investigate the corporate governance of the privately held energy company Sable Permian Resources.

The blurring of traditional roles has led private equity groups to take a different stance in such battles. Ever since Leon Black co-founded the group in 1990 from the ashes of bad debt house Drexel Burnham, Apollo has always taken opportunistic stances on distressed debt, trying to profit by trading in corporate loans and bonds. in trouble.

But today, the majority of Apollo’s assets under management come from a $ 216 billion debt arm, which lends to businesses and purchases regular corporate debt. Blackstone’s debt unit, GSO Capital, now exceeds $ 130 billion in assets.

$ 500 million

New financing provided to Travelport by its private equity owners, Elliott Management and Siris Capital

Steven Kaplan, a private equity expert at the University of Chicago, said this creates contradictions that are increasingly apparent among large, diversified alternative investment firms.

“This is a very natural development given the increased amount of alternative funding and the overlap of buyout, credit and hedge funds in the distress space,” he said.

Apollo’s rivals enjoy a schadenfreude moment. At one point, the private equity group had such a reputation for playing hard with the creditors of its holding companies, that it began to fear that traditional debt buyers would be wary of funding its future buyouts and in doing so. 2015, Apollo embarked on what investors called a “tour of apologies.”

Even though private equity pioneers dug deeper into credit, some large hedge funds are growing in the opposite direction. Elliott Management, founded by ex-lawyer Paul Singer, is best known as a fierce, troubled debt investor unafraid to take on big companies or even Argentina. In the Caesars case, for example, where she held a billion dollar debt, she filed a lawsuit accusing Caesars co-owner Apollo of “incredibly brazen corporate looting” for casino sales that the creditors, including Elliott, believed to have belonged to them. (Elliott eventually settled down with Caesars and Apollo).

Bankruptcies in the United States at their highest for eight years

Since then, Elliott has become a primary lender in technology buyouts. He even created his own private equity unit, Evergreen Coast Capital, which specializes in technology LBOs – and now finds himself in the crosshairs of credit hedge funds that have bought one of his holding company’s debts.

Travelport, a reservation software company acquired by Evergreen and Siris Capital, has been accused by existing lenders of “asset stripping” after $ 500 million secured in debt financing from its two owners to alleviate a liquidity shortage, in a deal that pushed intellectual property guarantees away from other creditors.

Travelport chose Elliott / Siris financing over a proposal from existing creditors, including Blackstone’s credit arm, GSO, and, faced with grunts from the aggrieved party, Elliott applied to a New York State court to affirm that the transaction was appropriate.

Ironically, Blackstone previously owned Travelport, taking money out of the company in 2007 through a dividend recapitalization that sparked a clash with bondholders in 2011.

Some long-time players in the debt market consider the current wave of disputes to be normal, even if the players find themselves in unusual roles. Debt investing is increasingly an accepted way, alongside traditional private equity, for savvy investment firms to use existing skills to gain control of firms.

But there is reason to believe that the current economic downturn could result in increasingly aggressive tactics from private equity owners seeking to protect their businesses.

Some insiders note fundamental changes in the ecosystem beyond the mere evolution of asset managers. The big Wall Street banks are no longer big holders of leveraged loans, and are also less active as loan “agents”, the paper administrators who sometimes play the role of mediator or traffic policeman. .

Another difference also this time, the debt without onerous covenants has skyrocketed. According to data compiled by Moody’s, its high yield bond covenants quality index is below its “lowest level protection” threshold since late 2014.

“There is a lack of discipline in the lending market and it has spawned a new era of ultra-aggressive transactions,” said one of the leading finance advocates. “Private equity firms have debt arms that are subject to the whims of other private equity firms. You can’t really have sympathy for any of them.



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Guitar Center Announces Global Agreement to Reduce Debt and Provide Significant Funding to Support Business Plan http://www.12005b.info/guitar-center-announces-global-agreement-to-reduce-debt-and-provide-significant-funding-to-support-business-plan/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/guitar-center-announces-global-agreement-to-reduce-debt-and-provide-significant-funding-to-support-business-plan/ The agreement provides that all financial obligations to vendors, suppliers and employees will continue to be paid in full in the normal course. Business operations will continue uninterrupted The deal includes up to $ 165 million in new equity investments to recapitalize the business and reduce debt by nearly $ 800 million Provides $ 375 […]]]>


The agreement provides that all financial obligations to vendors, suppliers and employees will continue to be paid in full in the normal course.

Business operations will continue uninterrupted

The deal includes up to $ 165 million in new equity investments to recapitalize the business and reduce debt by nearly $ 800 million

Provides $ 375 million in additional short-term liquidity

Guitar Center, Inc., (the “Company”), the world’s leading manufacturer of musical instruments, today announced that it has entered into a full Restructuring Support Agreement (the “RSA”) with its principal parties stakeholders, including its sponsor, a fund managed by the Private Equity Group of Ares Management Corporation, new equity investors Brigade Capital Management and a fund managed by The Carlyle Group, as well as qualified majorities of its groups of noteholders . The RSA provides for a global transaction that deleverages the Company’s balance sheet, will improve financial flexibility and provide additional liquidity to continue to support its vendors, suppliers and employees. RSA positions the Company to return to the growth trajectory it was on before the COVID pandemic.

Ron Japinga, CEO of Guitar Center, said: “Today we announced a very important and positive step forward to ensure the long term financial strength of Guitar Center. This agreement will allow us to significantly reduce our debt and reinvest in our business in order to better serve our customers and fulfill our mission to bring more music to the world.With ten consecutive quarters of growth before the impact of COVID-19, We are pleased with our resilient financial performance in these difficult times created by the pandemic As a result of this financial restructuring process, we will be better equipped to execute and invest in our strategic growth initiatives and we will continue to deliver through the strength of our brands, our store availability, customer-focused associate relationships, innovative music education programs and our expanding digital solutions. “

The RSA is intended to allow Guitar Center and its associated brands (including Music & Arts, Musician’s Friend, Woodwind Brasswind and AVDG) to continue to operate normally during the implementation of the transaction. As a result of the RSA, Guitar Center will continue to meet its financial obligations to vendors, suppliers and employees, and intends to make full payments to these parties without disruption in the normal course of business.

Guitar Center will continue to provide uninterrupted service to its customers through its existing channels, including stores, websites, call centers and social media pages, and will continue to receive merchandise and ship customer orders. as usual. All merchandise credits, prepaid lessons, rentals, gift cards, deposits, orders, financing and guarantees will be honored. While Guitar Center is pleased with the overall footprint of its stores, the company has engaged A&G to explore opportunities to optimize its real estate portfolio and other agreements to focus on investments that best position the company to return to its growth trajectory before COVID-19.

Other information concerning the reorganization procedure

To implement the financial restructuring plan (the “Plan”) contemplated by RSA, Guitar Center plans to file voluntary Chapter 11 reorganization petitions with the United States Bankruptcy Court. Currently, qualified majorities of the Company’s noteholder groups have signed the RSA and committed to vote in favor of the Plan, above the support thresholds required in the respective agreements to approve the Plan. Guitar Center expects the process to be completed before the end of 2020.

The proposed transaction will be supported by up to $ 165 million in new equity investments from a fund managed by the Private Equity Group of Ares Management Corporation, a fund managed by the Carlyle Group and Brigade Capital Management.

Guitar Center has negotiated for a total of $ 375 million in debtor-in-charge (“DIP”) financing provided by some of its existing ABL noteholders and lenders. Under the RSA, the Company currently intends to raise $ 335 million in new senior secured notes. UBS Investment Bank will act as the lead placement agent in this effort.

The New Senior Secured Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and may not be offered or sold to. United States in the absence of registration or exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities referred to in this document, nor will there be any sale of the New Senior Secured Notes, in any event. jurisdiction in which such offer, solicitation or sale would be illegal prior to registration or qualification under the securities laws of such jurisdiction.

Milbank LLP acts as legal advisor to the Company and BRG as restructuring advisor. Houlihan Lokey is the company’s financial advisor.

Stroock & Stroock & Lavan LLP acts as legal counsel to an ad hoc group of holders of secured notes and Province acts as financial advisor.

Kirkland & Ellis LLP is legal counsel to Ares Management Corporation

Debevoise & Plimpton LLP acts as legal advisor to Brigade Capital Management and GLC Advisors & Co. acts as financial advisor.

Paul, Weiss, Rifkind, Wharton & Garrison LLP is legal counsel to The Carlyle Group.

About Guitar Center:

Guitar Center is a leading retailer of musical instruments, lessons, repair and rental in the United States With nearly 300 stores in the United States and one of the best direct selling sites in the industry, Guitar Center has been helping people make music for over 50 years. Guitar Center also provides its clients with various services focused on musicians, including Guitar Center Lessons, where musicians of all ages and skill levels can learn to play a variety of instruments in many musical genres; GC Repairs, an on-site maintenance and repair service; and GC Rentals, a program offering easy rentals of instruments and other sound equipment. Additionally, Guitar Center’s sister brands include Music & Arts, which operates more than 200 stores specializing in the sale and rental of orchestral and orchestral instruments, serving teachers, conductors, performers, university professors and students, and Musician’s Friend, a leading direct distributor of musical instruments. in the USA.

Forward-looking statements

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements express our current expectations, opinions, beliefs or forecasts of future events and performance. A statement identified by the use of forward-looking words such as “may”, “expects”, “projects”, “anticipates”, “plans”, “believes”, “estimate”, “will”, “should” and certain of the other foregoing statements may be deemed to be forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve risks and uncertainties which may cause actual future activities and results to differ materially from those suggested or described in this press release. By issuing forward-looking statements based on current expectations, opinions, views or beliefs, the Company has no obligation and, except as required by law, does not undertake any obligation to update or to revise these declarations or to provide any other information relating to these declarations. .

See the source version on businesswire.com: https://www.businesswire.com/news/home/201113005731/en/

Contacts

Ira Gorski
ira.gorsky@edelman.com
(732) 740-5872

Jordan fisher
jordan.fisher@edelman.com
(573) 470-1803v



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RAADR to Settle Debt with Lender Typenex Co-Investment, LLC http://www.12005b.info/raadr-to-settle-debt-with-lender-typenex-co-investment-llc/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/raadr-to-settle-debt-with-lender-typenex-co-investment-llc/ PHOENIX, March 9, 2021 / PRNewswire / – RAADR, Inc. (OTC PINK: RDAR or the “Company”), a technology and software development company that monitors cyberbullying and social media platforms with artificial intelligence, is pleased to announce that it has entered into a settlement agreement with one of the previous Typenex Co-Investment, LLC (“Typenex”) of the […]]]>


PHOENIX, March 9, 2021 / PRNewswire / – RAADR, Inc. (OTC PINK: RDAR or the “Company”), a technology and software development company that monitors cyberbullying and social media platforms with artificial intelligence, is pleased to announce that it has entered into a settlement agreement with one of the previous Typenex Co-Investment, LLC (“Typenex”) of the previous lender.

The Company had previously sold and issued to Typenex a promissory note on November 23, 2015 (the “Promissory Note”) for an initial capital of $ 280,000.00 under a securities purchase agreement between the two companies dated November 23, 2015 (the “Purchase Agreement”).

The Company and Typenex entered into a Note Settlement Agreement dated March 8, 2021 (the “Settlement Agreement”) to fully settle the obligations owed under the Promissory Note and the Purchase Agreement.

Pursuant to the Settlement Agreement, Typenex has given the Company a conversion notice whereby the Company is obligated to issue to Typenex eighty-eight million (88,000,000) ordinary shares of the Company in full settlement. of the promissory note.

“My goal is to eliminate the old debt convertible into RAADR this year! The announcement of this settlement agreement is a perfect example! We will continue to negotiate with the company’s lenders to eliminate debt, ”said CEO Jacob Di Martino.

Contact: Jacob Dimartino, jacob.d@raadr.com

Cision

Show original content:http://www.prnewswire.com/news-releases/raadr-to-settle-debt-with-lender-typenex-co-investment-llc-301242818.html

SOURCE RAADR, Inc.



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Zambia’s debt demand shows the limits of Chinese checkbook diplomacy http://www.12005b.info/zambias-debt-demand-shows-the-limits-of-chinese-checkbook-diplomacy/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/zambias-debt-demand-shows-the-limits-of-chinese-checkbook-diplomacy/ Zambia’s demand for a global suspension of debt service from creditors brings the country closer to default and highlights the limits of Chinese debt diplomacy. The government has decided to ask all external creditors to accept the suspension of debt service on the same terms, the Zambian finance ministry said in a statement on October […]]]>


Zambia’s demand for a global suspension of debt service from creditors brings the country closer to default and highlights the limits of Chinese debt diplomacy.

The government has decided to ask all external creditors to accept the suspension of debt service on the same terms, the Zambian finance ministry said in a statement on October 13.

The only debt denominated in foreign currencies that Zambia will continue to pay comes from multilateral agencies, as well as the debt of a few priority projects, the statement added.

“If Zambia does not come to an agreement with its commercial creditors. . . the Republic with its limited fiscal space will be unable to make payments and, therefore, will fail to prevent the accumulation of arrears.

At the heart of the problem is debts to Chinese commercial lenders. In a separate statement to the London Stock Exchange (LSE) on Oct. 7, the Zambian Ministry of Finance said the state of discussions on the postponement of debt service “varies among Chinese lenders.”

Zambia “hopes to formalize all debt service suspension agreements before the end of the year,” the statement said.

  • Zambia is vulnerable to default in the absence of confirmation from Beijing that it recognizes the China Exim Bank, which finances the expansion of Kenneth Kaunda International Airport, as official creditor, said Nick Branson, director of Gondwana Risk in London.
  • Even though Zambia gets the $ 225 million in debt service relief it has requested from what the G20 considers Chinese bilateral creditors, the state owes an additional $ 158 million to unofficial creditors Chinese, Branson said.
  • Zambia has yet to come up with a plan for $ 200 million in arrears to Beijing, he adds.

Belt and road limits

The current situation illustrates some of the limitations of China’s Belt and Road initiative, explains Gabriel Collins, co-founder of the China SignPost research group in the United States.

  • Lending diplomacy “often fails to buy lasting strategic influence,” he says. “Such an influence is, at best, temporarily rented and financial outlays that opened doors when times were good suddenly become liabilities when a macroeconomic shock leaves debtors unable to pay.
  • “Chinese lenders will eventually agree to Beijing’s demands, but in the meantime they will push their cause as far as they deem politically desirable in an attempt to at least minimize the haircut that could occur,” Collins said. , researcher at the Baker Institute at Rice University. for public policy.

Chinese commercial lenders see a wealth of assets such as copper outlet that could be used to meet obligations, Collins says. But Beijing is unlikely to allow this because Zambia would view such a position as “a hostile act that would destroy any strategic position China might have gained through the loans.”

  • It is “very likely” that the Chinese government will eventually see its commercial lenders publicly write off some debts or allow temporary forbearance, but then pay them off privately, Collins said. Such a reward could come from measures in China, such as direct money transfers or preferential participation in projects, he adds.

The BRI is “a good deal more fragmented and chaotic than most Western media coverage claims, explains Sébastien Strangio, author of a new book “In the shadow of the dragon”, which traces the extension of Chinese power in Southeast Asia.

  • “While Chinese private lenders and the Chinese state are undoubtedly close, there may be limits to how far the state can go to tell the former what to do. After all, Chinese commercial lenders have their own economic measures and incentives that would ease restructuring or forgiveness of foreign debts. “

The Zambian experience shows that China’s lending strategy must change, says Harry Broadman, president of the emerging markets practice at Berkeley Research Group LLC in Washington. He wonders why a borrower like Zambia wouldn’t go to a commercial bank – which has no political ulterior motive – if the loans are made at commercial rates.

  • “If China is to stay in the game of international creditors – where, because of its political structure, it is not a commercial economy and its motives as a lender are much more than commercial – it has to make itself attractive by ‘other ways for debtors if they want to apply commercial rates,’ Broadman says.

Conclusion: As British economist John Maynard Keynes once said: “If you owe your bank a hundred pounds, you’ve got a problem. But if you owe a million, it is.

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EU backs half a trillion euro stimulus, but reluctant to pool debt http://www.12005b.info/eu-backs-half-a-trillion-euro-stimulus-but-reluctant-to-pool-debt/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/eu-backs-half-a-trillion-euro-stimulus-but-reluctant-to-pool-debt/ BRUSSELS – Finances of the European Union Ministers agreed on Thursday evening on a plan calling for more than half a trillion euros in new measures to bolster their economies against the onslaught of the coronavirus, but dealt a blow to their most affected members, l ‘Italy and Spain, avoiding their calls for the bloc […]]]>


BRUSSELS – Finances of the European Union Ministers agreed on Thursday evening on a plan calling for more than half a trillion euros in new measures to bolster their economies against the onslaught of the coronavirus, but dealt a blow to their most affected members, l ‘Italy and Spain, avoiding their calls for the bloc to issue a common debt.

Even in the face of an unprecedented economic crisis caused by a virus that killed more than 50,000 citizens of the bloc and infected more than half a million, the richest countries in Northern Europe were reluctant to subsidize cheap debt for the hard-hit south.

And while Germany, the Netherlands and others have shown greater generosity than in previous crises, details of the measures announced have shown that they have gone to great lengths to limit and control how funds are used.

The programs that finance ministers agreed to recommend to their country’s leaders for final approval included a € 100 billion loan plan for unemployment benefits, € 200 billion in loans for small businesses and access to 240 billion euros in loans for euro area countries in order to tap into the euro area rescue fund. One euro equals about $ 1.09.

But ministers were unable to reach an agreement on the issuance of joint bonds, called “corona-bonds”, despite calls from the leaders of Italy and Spain, who are bearing the brunt of the crisis, after fierce resistance from Germany, the Netherlands and others. And, in a victory for the Netherlands pushing to restrict the use of bailout funds, ministers decided they should be limited to health-related programs.

Throughout its history, the European Union has refused to issue joint bonds, but the scale and scale of the current crisis had led some analysts to believe that the bloc might be willing to support the idea this times, which would have represented a major step in bringing closer to becoming the United States of Europe. Debt pooling was the basis of the creation of the United States, and this would be seen as an important step in the bloc’s governance structures moving towards federalism.

But the need for unanimous support for major measures – always a brake on swift and bold decisions by the European Union in times of crisis – derailed the idea of ​​the obligation and meant that negotiations on the form of the economic package were strained. It took a second meeting to reach consensus, after an attempt on Tuesday ended in acrimony.

Finance ministers were well aware of the dramatic toll the virus was taking on all the economies of the bloc and that a failure to produce a deal would be disastrous for the confidence of the citizens of the bloc and for the financial markets. As the United States prepared to announce stimulus measures, there was a growing sense that Europe was once again doing too little and too slowly.

“The most important thing for the finance ministers was to sign an agreement and a slogan of 540 billion euros,” said Mujtaba Rahman, head of the Europe practice at Eurasia Group, a consultancy firm. “But despite everyone patting each other on the back, there are a lot of substantial loopholes in the deal which will not become apparent until later,” he added.

At stake is the recovery of the richest bloc of nations in the world, including the 19 members of the euro area whose currency is one of the largest in the world.

Failure by the European Union to help its most affected members would not only harm its economies, but would also affect regional policy and societal attitudes, and cause the bloc to lose weight on the world stage.

Although the figure of half a billion euros, as well as the national stimulus programs of each country, represent a significant sum, it is still difficult to assess whether it will be almost enough to help European economies resist. the fallout from the health crisis and to achieve all kinds of growth as economic activity gradually picks up.

The richer countries in the bloc may have thwarted common obligations, but, inevitably, bailouts for the worst-hit economies will involve subsidies from the richer north to the poorer south, a recurring and toxic theme in the history of the block.

While all countries agreed on Thursday that there should be “solidarity” with the countries most affected and that European economies are so deeply integrated that the bailouts are useful to all, the the form of this solidarity has proved to be deeply controversial.

For Italian Prime Minister Giuseppe Conte, Thursday’s deal will be a tough sell: he has passionately defended the joint issuance of debts and demanded easier access to the eurozone bailout fund to support the resumption of its debt. country. He has neither.

Joint bonds would increase borrowing costs for the wealthiest and most frugal northern countries, whose leaders fear such a move could fuel anti-EU populist forces within their borders. They argue that, by treaty, each member country of the European Union is responsible for its own finances.

But anti-European sentiment is also on the rise in Italy and Spain, the third and fourth countries and economies in the bloc, and the two EU countries hardest hit by the virus. The outrage and despair over thousands of deaths has fueled the feeling that Europe is not helping them in their difficult times.

The internal political struggles between the leaders and ministers of the bloc, roughly drawing the battle lines of previous crises that have pitted members of the north against those of the south, are threatening to breed a new wave of Euroscepticism and populism.

The European Union, already battered for ten years by a major financial crisis, the migration crisis and Brexit, cannot afford to default on its members and allow questions about its usefulness to deepen.

The recession that the euro zone will experience because of the coronavirus promises to be brutal: economists predict that the production of the bloc should decline this year by around 10%. In contrast, the recession that followed the last financial crisis was, at its worst year in 2009, 4.5% in the euro area.

This week brought home at what point things are improving in some of the region’s largest economies. New data released on Wednesday showed that the French economy, the region’s second-largest, shrank 6% between January and April compared to the last quarter of 2019, the worst performance in half a century, and is now officially in recession. .

And in Germany, the continent’s main economy, five major institutes have predicted that the second quarter of this year will lead to a 10% recession. For Italy and Spain, things could be even worse, with UniCredit predicting a 15% recession in each.

Paolo Gentiloni, EU economy commissioner and former Italian prime minister, advocate for a special coronavirus fund and joint corona bonds, said Thursday’s measures were not the last word in the collective economic response from Europe.

The fund was vaguely mentioned at the bottom of ministers’ conclusions as a “stimulus fund” to be discussed further by EU leaders next week.

“This is not the end of the road. Thousands of European citizens are still fighting for their lives, ”said Gentiloni.



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Rockwell Medical, Inc.Announces $ 35 Million Debt Financing Agreement with Innovatus Capital Partners, LLC http://www.12005b.info/rockwell-medical-inc-announces-35-million-debt-financing-agreement-with-innovatus-capital-partners-llc/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/rockwell-medical-inc-announces-35-million-debt-financing-agreement-with-innovatus-capital-partners-llc/ First tranche of $ 22.5 million funded at closing WIXOM, Michigan, March 17, 2020 (GLOBE NEWSWIRE) – Rockwell Medical, Inc. (RMTI) (“Rockwell Medical” or the “Company”), a biopharmaceutical company dedicated to transforming anemia management and improved patient outcomes globally, today announced that it has entered into a debt financing agreement with a subsidiary of Innovatus […]]]>


First tranche of $ 22.5 million funded at closing

WIXOM, Michigan, March 17, 2020 (GLOBE NEWSWIRE) – Rockwell Medical, Inc. (RMTI) (“Rockwell Medical” or the “Company”), a biopharmaceutical company dedicated to transforming anemia management and improved patient outcomes globally, today announced that it has entered into a debt financing agreement with a subsidiary of Innovatus Capital Partners, LLC (“Innovatus”) to provide the Company with up to 35, $ 0 million in term loans.

“We are delighted to partner with Innovatus on this transaction,” said Stuart Paul, President and CEO of Rockwell Medical. “This funding will provide flexibility as we continue our mission to advance our new treatment, Triferic, and transform the way anemia is managed around the world,” Paul concluded.

On March 16, 2020, the Company entered into a loan and guarantee agreement (the “Loan Agreement”) with Innovatus pursuant to which Innovatus agreed to grant certain term loans in an aggregate principal amount of up to 35 . $ 0 million, with the first tranche of $ 22.5 million funded at closing. The Company will be eligible to draw on a second tranche of $ 5,000,000 upon completion of certain milestones, including approval by the United States Food and Drug Administration of the Company’s NDA for IV Triferic. The Company will be eligible to draw on a third tranche of $ 7.5 million upon reaching certain additional milestones, including reaching certain sales thresholds for Triferic. The Company is entitled to pay interest only for thirty months, or up to thirty-six months if certain conditions are met. The loans will mature on the fifth anniversary of the original funding date. The loan agreement includes the usual coverage of warrants and is secured by all of the assets of the company. The proceeds will be used for working capital purposes.

“We are delighted to partner with Rockwell Medical in their quest to transform the management of anemia in dialysis patients,” said Claes Ekstrom, CEO of Innovatus.

This transaction is the culmination of a multi-step financing process that Rockwell Medical initiated during the fourth quarter of 2019. At the request of shareholders, the Company has prioritized non-dilutive financing options as part of the process, and the Company completed the public offering of common shares in February 2020 to facilitate this non-dilutive financing.

Cantor Fitzgerald & Co acted as sole financial advisor to Rockwell Medical in this transaction.

Additional details regarding the Company’s funding are included in the Company’s current report on Form 8-K which is expected to be filed with the Securities and Exchange Commission within four business days of the date of this press release.

About Rockwell Medical

Rockwell Medical is a biopharmaceutical company dedicated to transforming the management of anemia in a wide variety of therapeutic areas and around the world, improving the lives of critically ill patients. The Company’s initial objective is the treatment of anemia in end-stage renal disease (ESRD). Rockwell Medical’s proprietary renal therapy, Triferic (Ferric Pyrophosphate Citrate), is the only FDA approved therapy indicated for iron replacement and hemoglobin maintenance in hemodialysis patients. The Company has developed several formulations of Triferic (1) FDA-approved Triferic Dialysate and (2) IV Triferic, for which the Company filed a new drug application in May 2019. Rockwell Medical is also a manufacturer, supplier and operator. an established leader in delivering high quality hemodialysis concentrates / dialysates to dialysis suppliers and distributors in the United States and internationally.

Innovatus Capital Partners, LLC

Innovatus Capital Partners, LLC, is an independent advisor and portfolio management company with approximately $ 1.65 billion in assets under management. Innovatus adheres to an investment strategy that identifies disruptive and growth opportunities across multiple asset classes with a unifying theme of capital preservation, income generation and upside option. The company has a dedicated team of life science investment professionals with extensive experience in the health field, including life sciences. Innovatus and its executives have significant experience in debt financing of medical device, diagnostics and biotechnology companies that address unmet medical needs, improve patient outcomes, and reduce overall healthcare spending. Further information can be found at www.innovatuscp.com.

About Triféric

Triferic is the only treatment approved by the FDA in the United States indicated to replace iron and maintain hemoglobin in patients receiving hemodialysis via dialysate during each dialysis treatment. Triferic has a unique and differentiated mechanism of action that has the potential to benefit patients and the healthcare economy. Triferic represents a potential innovative medical advance in the management of iron in hemodialysis patients, with the potential to become the future standard of care.

Triferic delivers about 5-7 mg of iron with each hemodialysis treatment to the bone marrow and maintains hemoglobin without increasing stores of iron (ferritin). Triferic donates iron immediately and completely to the transferrin (iron transporter in the body) when it enters the bloodstream and is then transported directly to the bone marrow to be incorporated into the hemoglobin, without an increase in ferritin (stored iron). and inflammation) and no reports of anaphylaxis in more than 1,000,000 patient administrations, meeting a significant medical need to overcome functional iron deficiency (FID) in patients with ESRD.

Important safety information

Serious hypersensitivity reactions, including anaphylactic-type reactions, some of which are life threatening and fatal, have been reported in patients receiving parenteral iron products. Patients may present with shock, clinically significant hypotension, unconsciousness and / or collapse. Monitor patients for signs and symptoms of hypersensitivity during and after hemodialysis until clinically stable. Staff and therapies must be immediately available for the treatment of severe hypersensitivity reactions. Hypersensitivity reactions were reported in 1 (0.3%) of 292 patients receiving Triferic in two randomized clinical trials.

Iron status should be determined on pre-dialysis blood samples. Post-dialysis serum iron parameters may overestimate serum iron and transferrin saturation.

The most common adverse reactions (≥ 3% and at least 1% more than placebo) in controlled clinical studies include:), peripheral edema (6.8%), dyspnea (5.8%), back pain (4 , 5%), fever (4.5%), urinary tract infection (4.5%), asthenia (4.1%), fatigue (3.8%), arteriovenous (AV) thrombosis of the fistula (3.4 %), and bleeding from the AV fistula site (3.4%).

Forward-looking statements

Certain statements contained in this press release may constitute “forward-looking statements” within the meaning of federal securities laws, including, but not limited to, Rockwell Medical’s expectations regarding the completion of the Offer, the terms and conditions. of the Offer and the satisfaction of customary closing conditions relating to the Offer and the intended use of the net proceeds of the Offer. Words such as “may”, “could”, “will”, “should”, “believe”, “expect”, “anticipate”, “estimate”, “continue”, “could”, “predict” “,” Forecast “,” project “,” intend “or similar expressions, or statements concerning current intention, belief or expectations, are forward-looking statements. Although Rockwell Medical believes these forward-looking statements are reasonable, we should not place undue reliance on these forward-looking statements, which are based on information available to us as of the date of this release. These forward-looking statements are based on current estimates and assumptions and are subject to various risks and uncertainties (including, without limitation, those set forth in Rockwell Medical’s SEC records), many of which are beyond our control and are subject to to change. Actual results could be materially different. Risks and uncertainties include: timing and regulatory approval process for our NDA filing for IV Triferic as filed with the FDA; timing and receipt of loan amounts from Innovatus; the ability of Rockwell Medical to achieve certain milestones under the loan agreement; and the intended use of the proceeds under the Loan Agreement, as well as the risks more fully discussed in the documents filed by Rockwell Medical with the SEC. Therefore, you should not place undue reliance on these forward-looking statements. Rockwell Medical expressly disclaims any obligation to update or modify any statement, whether as a result of new information, future events or otherwise, except as required by law.

Triferic® is a registered trademark of Rockwell Medical, Inc.

Contact
Investor Relations:
Lisa M. Wilson, Site Communications, Inc.
Phone. : 212-452-2793
E: lwilson@insitecony.com

Source: Rockwell Medical, Inc.



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Speaking the Language of Portability: How Portability Clauses Help Indebted Companies Conclude M&A Transactions – Corporate / Commercial Law http://www.12005b.info/speaking-the-language-of-portability-how-portability-clauses-help-indebted-companies-conclude-ma-transactions-corporate-commercial-law/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/speaking-the-language-of-portability-how-portability-clauses-help-indebted-companies-conclude-ma-transactions-corporate-commercial-law/ Canada: Speaking the Language of Portability: How Portability Covenants Help Indebted Companies Conclude M&A Transactions October 22, 2020 Norton Rose Fulbright Canada LLP To print this article, simply register or connect to Mondaq.com. There is no doubt that the Covid-19 pandemic has resulted in unprecedented social and economic ramifications, including a decrease in M&A activity […]]]>


Canada: Speaking the Language of Portability: How Portability Covenants Help Indebted Companies Conclude M&A Transactions

To print this article, simply register or connect to Mondaq.com.

There is no doubt that the Covid-19 pandemic has resulted in unprecedented social and economic ramifications, including a decrease in M&A activity in Canada. The pandemic has also brought about changes in the way agreements are drafted in light of what has become our new standard. Earlier, we reported that the pandemic has led to an increased focus on earn-out clauses in existing and new M&A transactions. A a recent trend has also emerged in loan transactions, where lenders agree to include portability language in loan documents, which can remove a barrier for private equity groups looking to engage in merger and merger activity. acquisition.

Credit agreements generally include change of control provisions that trigger an event of default when the borrower is sold or acquired by a third party. Lenders typically require those provisions that require the borrower to repay the existing loan, and if the existing lender wishes to continue providing credit, they have the flexibility to reassess the risks associated with a change in ownership and make any necessary adjustments. to credit agreements. While the change of control provisions offer protection to existing lenders, they can also make M&A more difficult, as the borrower will have to enter into new financing arrangements either by refinancing their current loan with a existing lender, or by finding new lenders and paying off existing loans. Recently, more and more lenders have agreed to include a portability clause in loan agreements which allows the borrower to be sold without refinancing or repayment and the existing loan is transferred to the buyer on the same terms. and conditions only with the current borrower. As businesses rack up more debt due to the economic downturn linked to Covid, portability clauses in loan agreements can make it easier for the company to engage in merger and acquisition transactions. . The portability clause is also an attractive option for buyers, who would otherwise be required to enter into new financing agreements.

While lenders who agree to include the language of portability risk having the borrower’s outstanding loans taken over by a third party whose management of the borrower could negatively affect its creditworthiness, lenders may be able to protect against such risks by ensuring that the portability of existing loans is available to buyers who have been deemed appropriate by the lender. This would require careful drafting on the part of the lenders to ensure that the carry criteria were clearly defined in the loan agreement. In a merger and acquisition transaction, it may also mean that the borrower may be required to ensure that the lender has given their consent to the transaction to ensure that there will be no problem with the transaction. debt carry at closing. While this trend may be encouraging for some borrowers who wish to discuss the possibility of including portability clauses in loan agreements with their creditors, the inclusion of such clauses will depend on the circumstances of the borrower and the loan agreement.

The author would like to thank Moosa Syed, Intern, for his contribution to this legal update.


About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is an international law firm. We provide the world’s largest companies and financial institutions with comprehensive business law services. We have 3,800 lawyers and other legal staff based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong in all key industry sectors: financial institutions; energy; infrastructure, mining and raw materials; transport; technology and innovation; and life sciences and health care.

Wherever we are, we operate according to our global business principles of quality, unity and integrity. We aim to provide the highest level of legal service possible in each of our offices and to maintain that level of quality at every point of contact.

For more information on Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

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Governments issued more debt than ever in the past month http://www.12005b.info/governments-issued-more-debt-than-ever-in-the-past-month/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/governments-issued-more-debt-than-ever-in-the-past-month/ The economic impact of the coronavirus pandemic prompted governments to issue more debt than ever in April, according to data provided by the Institute of International Finance. The Covid-19 epidemic has forced countries to close their doors, with many governments imposing draconian restrictions on the daily lives of billions of people. To date, containment measures […]]]>


The economic impact of the coronavirus pandemic prompted governments to issue more debt than ever in April, according to data provided by the Institute of International Finance.

The Covid-19 epidemic has forced countries to close their doors, with many governments imposing draconian restrictions on the daily lives of billions of people.

To date, containment measures have been implemented in 187 countries or territories in an attempt to slow the spread of the virus. The restrictions are expected cause the worst economic shock since the Great Depression of the 1930s.

He forced world leaders to swiftly deploy emergency financial measures and put in place aggressive stimulus packages in a bid to avert a devastating economic collapse.

“An increase in debt is inevitable. It is going to happen – these are stressful times, so there is no reason to wonder why they are borrowing,” Emre Tiftik, debt specialist at the Institute of International Finance. .

The IIR’s Global Debt Monitor found that global general debt issuance (bonds and loans) hit a record $ 2.6 trillion in April, up from $ 2.1 trillion in March.

To put this in context, Tiftik said the global debt issuance figures were more than twice the historical norms. He argued that this reflects the extraordinary scale of the accumulation of global debt as governments scramble to offset the economic impact of an unprecedented global health crisis.

The U.S. Federal Reserve Building is located in Washington, DC, the United States, Wednesday, June 24, 2009.

Brendan Smialowski | Bloomberg | Getty Images

It’s “scary but, again, it has to be done, so we’re trying to fix the liquidity issue,” Tiftik said.

The US government turned out to have accounted for $ 1.4 trillion of the world’s total general debt issuance in April and $ 1.2 trillion in March. The world’s largest economy has by far embarked on the biggest bailout of any country.

“Keep receipts”

The International Monetary Fund has said that a rapid increase in global public debt could present risks once the threat of the pandemic subsides.

In a report published on April 15, the Fund noted: “In an emergency, the implication for policy makers is to do whatever it takes, but be sure to keep receipts.”

At the time, global authorities had already taken fiscal measures amounting to around $ 8 trillion to contain the pandemic and limit its damage to the economy.

The pandemic and the associated “Grand Lockdown” have resulted in an increase in debt beyond those recorded during the global financial crisis, the Fund said, with public debt ratios likely to stabilize at more recent levels. – higher – as the pandemic abates.

Hanging signal with a message in Spanish that reads “protect your mouth with a mask” in the empty landscape of the Buenos Aires Obelisk during the government-ordered lockdown on May 1, 2020 in Buenos Aires, Argentina.

Ricardo Ceppi | Getty Images

Ian Shepherdson, chief economist at Pantheon Macroeconomics, told CNBC by telephone that the relatively small number of voices complaining about the dangers of rising public debt “completely missed the point.”

“Public debt is a second-rate issue, maybe even a third-rate issue now given the havoc the virus has taken on the global economy,” he said.

“The main objective is to limit or improve the damage, we cannot prevent it, for sure, but to try to use fiscal policy to prevent the economy from being a wasteland when the virus will be defeated. “

“It’s not really a choice,” Shepherdson continued. “You could wear a hair shirt and say, ‘We’re not going to spend the money because we want to protect future generations.’ But, the next generation will have nothing to inherit because the economy will have been completely destroyed – and that cannot be in anyone’s interest. “

“Who will benefit from this additional debt? “

At the start of the year, the World Bank had warned on the heightened risk of a new global debt crisis, arguing that the build-up in global borrowing since 2010 has been “the largest, fastest and most widespread increase” since the 1970s.

The group had urged governments and central banks to recognize that historically low interest rates may not be enough to offset another widespread financial collapse.

The coronavirus crisis and historically large budget spending programs have since prompted some to warn that developed economies could find themselves on the brink of a medium-term debt crisis.

“We can save the day by borrowing money, but the problem is, where are we going to use that money? Who will benefit from this additional debt? Says Tiftik of IIR.

A man wearing a surgical mask works on his computer on Broadway Avenue as New Yorkers practice “social distancing” due to the COVID-19 pandemic on April 12, 2020 in New York City, United States.

Roy Rochlin | Getty Images

“Right now we’re trying to stop the bleeding, but now we’re starting to focus on healing. So how are we going to cure it so that it’s much better for everyone?”

When asked if the coronavirus outbreak could turn out to be the trigger for another global debt crisis, Tiftik replied, “Everyone is doing everything they can to make sure this is not not the case. “



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Peabody enters into support agreement with certain creditors for debt relief, debt maturity extension and note exchange offer http://www.12005b.info/peabody-enters-into-support-agreement-with-certain-creditors-for-debt-relief-debt-maturity-extension-and-note-exchange-offer/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/peabody-enters-into-support-agreement-with-certain-creditors-for-debt-relief-debt-maturity-extension-and-note-exchange-offer/ ST. LOUIS, December 24, 2020 / PRNewswire / – Peabody (NYSE: BTU) has entered into a transaction support agreement with 100% of its revolving lenders and letter of credit issuers and approximately 65% ​​of its 6,000% senior secured bonds due 2022 , which envisions a comprehensive financing solution to extend certain maturities of Peabody’s debt […]]]>


ST. LOUIS, December 24, 2020 / PRNewswire / – Peabody (NYSE: BTU) has entered into a transaction support agreement with 100% of its revolving lenders and letter of credit issuers and approximately 65% ​​of its 6,000% senior secured bonds due 2022 , which envisions a comprehensive financing solution to extend certain maturities of Peabody’s debt and provide relief from financial commitments, while maintaining sufficient operating liquidity and financial flexibility.

“Today’s announcement is important to the company as well as to its many stakeholders,” said Peabody President and CEO. Glenn kellow. “The closing of the exchange transaction will provide Peabody with the flexibility to continue to seek operational improvements across our operations as well as to seize potential improvements in the marine and thermal market.”

Pursuant to the Transaction Support Agreement, the creditors have committed, subject to its terms, to support the implementation of an offer to exchange the 2022 Senior Secured Notes for new 2024 Notes at issued by Peabody and certain subsidiaries. The company’s revolving credit lenders have also agreed to convert the existing revolving credit facility into new term loans and a letter of credit facility maturing in December 2024. november 2020, which remains contingent upon Peabody closing the recently initiated proposed exchange transactions.

“We are delighted to have entered into a support agreement with a substantial number of our creditors that lays the financial foundation for our future success and value creation,” said Mark Spurbeck, Executive Vice President and Chief Financial Officer. “This agreement would extend the maturity of our nearest debt to December 2024, eliminate the covenant of net debt from our credit agreement and, with the status quo of the guarantee, provide better visibility on future liquidity needs. “

Following the successful closing of the exchange offer, Peabody’s pro forma capital structure would include $ 1.52 billion of the debt financed and a $ 324 million letter of credit facility.

Peabody will file a Form 8-K with the Securities and Exchange Commission (SEC) regarding the transaction support agreement and related matters. Form 8-K is currently available on PeabodyEnergy.com under “Investor Relations – Presentations” and will be available on the SEC’s website at December 28, 2020. The related investor presentation will also be provided as part of the Form 8-K filing and is currently available on PeabodyEnergy.com under “Investor Relations – Presentations”. Any questions about exchange transactions should be addressed to Lazard or Jones Day.

December 28, 2020 at 10:00 am CST, Peabody will host a conference call to discuss transaction details. Participants can access Peabody’s call at PeabodyEnergy.com or by using the following call numbers:

United States and Canada

(888) 312-3049

Australia

1800 849 976

UK

0808 238 9907

All other international participants, please contact Peabody Investor Relations at IR@peabodyenergy.com prior to the call to receive your call number.

Peabody (NYSE: BTU) is a leading producer of coal, serving customers in more than 25 countries on six continents. We provide essential products to power basic electricity for emerging and developed countries and create the steel needed to build basic infrastructure. Our commitment to sustainability underpins our business today and helps shape our strategy for the future. For more information, visit PeabodyEnergy.com.

Contact:
Julie gates
314.342.4336

Forward-looking statements

This press release contains forward-looking statements within the meaning of securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variations of words such as “expects”, “anticipates”, “intention”, “plans”, “believes”, “research”, “estimates”, “projects”, ” forecast ”,“ targets ”,“ would ”,“ will ”,“ should ”,“ objective ”,“ could ”or“ could ”or other similar expressions. Forward-looking statements provide management’s current expectations or forecasts regarding future conditions, events or results. All statements that deal with operating performance, events or developments that Peabody believes will occur in the future are forward-looking statements, including the ability of the company to complete the exchange offer and solicitation. consent and the company’s expectations regarding future liquidity, cash flow, mandatory debt payments and other expenses. They can also include estimates of sales targets, cost savings, capital expenditures, other expense items, actions related to strategic initiatives, demand for the company’s products, liquidity, structure of capital, market shares, industry volume, other financial items, descriptions of management’s plans or objectives for future operations and descriptions of the assumptions underlying any of the items above. All forward-looking statements speak only as of the date they are made and reflect Peabody’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Further, Peabody disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those suggested by forward-looking statements. Factors that may cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond Peabody’s control, including the continued impact of the COVID-19 pandemic and factors described in Peabody’s annual report. Report on Form 10-K for the year ended December 31, 2019, and other factors that Peabody may describe from time to time in other filings with the SEC. You can get these documents free of charge from the Peabody website at www.peabodyenergy.com. You should understand that it is not possible to predict or identify all of these factors and, therefore, you should not view such a list as a complete set of all potential risks or uncertainties.

No offer or solicitation

This press release is not intended to and does not constitute an offer to sell or buy, or the solicitation of an offer to sell or buy, or the solicitation of any offers or consents with respect to of any title. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be illegal before registration or qualification under the securities laws of such jurisdiction. In the case of the Exchange Offer and the Consent Solicitation, the Exchange Offer and the Consent Solicitation are made only pursuant to the Offering Memorandum and the Consent Solicitation Statement, dated of December 24, 2020 (the “Offer Memorandum”) and only to persons and in jurisdictions authorized by applicable law. The Offering Memorandum and other documents relating to the Exchange Offer and the Consent Solicitation will only be distributed to eligible holders of the Company’s 6,000% Senior Secured Notes due 2022 (the “ existing tickets’) who complete and return an eligibility form confirming that they are either (a) a person who is in United States and is (i) a “Qualified Institutional Buyer” as that term is defined in Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), or (ii) an institutional “Approved Investor” (as of meaning of Rule 501 (a) (1), (2), (3) or (7) under the Securities Act, or (b) a person who is outside United States“and is (i) not a” US person “, as those terms are defined in Rule 902 of the Securities Act, and (ii) a” non-US person “(as defined in the offering memorandum) ( these holders, the “Eligible Holders”). Existing Holders of Notes who wish to obtain and complete an eligibility form should either visit the website for this purpose at https://gbsc-usa.com/eligibility/peabody or call Global Bondholder Services Corporation, the Information Agent and Exchange Agent for the Exchange Offer and Consent Solicitation at (212) 430-3774 (for banks and brokers) or ( 866) 470-4500 (free number). The full terms of the Exchange Offer and the Consent Solicitation are described in the Offering Memorandum.

Peabody. (PRNewsFoto / Peabody Energy)

Cision

Cision

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Powerful Argentinian Vice President calls for delay in debt deal with IMF http://www.12005b.info/powerful-argentinian-vice-president-calls-for-delay-in-debt-deal-with-imf/ Thu, 11 Mar 2021 08:11:26 +0000 http://www.12005b.info/powerful-argentinian-vice-president-calls-for-delay-in-debt-deal-with-imf/ Argentina updates Sign up for myFT Daily Digest to be the first to know about news from Argentina. Mighty Argentine Vice President Cristina Fernández de Kirchner and her left-wing administration allies want to postpone a crucial $ 44 billion debt deal with the IMF until the pandemic subsides, officials said , thus avoiding painful cuts […]]]>


Argentina updates

Mighty Argentine Vice President Cristina Fernández de Kirchner and her left-wing administration allies want to postpone a crucial $ 44 billion debt deal with the IMF until the pandemic subsides, officials said , thus avoiding painful cuts in spending ahead of the October midterm elections.

While Finance Minister Martín Guzmán recently said the government wants to conclude negotiations on a new deal with the IMF by May – later than the initially announced in March – powerful voices within the Peronist government of President Alberto Fernández want an even longer deadline.

Argentina, the IMF’s biggest debtor, is in the throes of a deep recession and lacks foreign exchange reserves. A 2018 loan contract got into trouble months after its first signing and the South American grain and beef exporter is vulnerable to yet another financial market crisis if investors lose confidence.

With more than 50,000 deaths from coronaviruses, the country is now easing restrictions after one of the longest and strictest lockdowns in the world.

“Cristina wants [to close a deal with the IMF] after the pandemic, ”said an influential official close to the Argentine vice-president, who is also president of the Senate and controls a large Peronist grassroots organization. The official’s point of view was echoed by others briefed on the talks.

The official admitted that it was impossible to say how long the coronavirus crisis could last. “It is not very serious to conclude an economic agreement at a time when we do not know whether [Argentina’s] the economy will remain open or closed, ”the official said. “We are in a hurry[in Argentina]. . . Don’t rush.

Gerry Rice, IMF Communications Director, said: “We continue to have very constructive discussions with the Argentine authorities as they develop their economic plan which could be supported by a Fund program. He noted that Kristalina Georgieva, Managing Director of the IMF, recently said that an agreement by May would require “additional efforts on the part of both parties”.

The bulk of Argentina’s debt repayments to the IMF are due in 2022-2023 and an agreement with the fund to reschedule them would boost market confidence. Argentina’s endemically volatile economy contracted by more than 10 percent last year, its third consecutive year of recession.

Net liquid foreign exchange reserves languish near zero, threatening further devaluation. Argentina’s last currency crash in 2018 precipitated the fund’s historic bailout. International investors remain reluctant to lend to Argentina after its ninth sovereign default last year, forcing Buenos Aires to borrow in local markets and print money to cover deficits.

But some members of the Peronist coalition argue that a 30% rise in soybean prices since November gives Buenos Aires more time to strike a deal with the IMF. This would help avoid the need to cut politically difficult spending ahead of the midterm elections in October, when the Peronists defend their majority in congress.

“Politically, the best time for Argentina to strike a deal is after the elections, but economically speaking, the best time is as soon as possible,” said a person briefed on the talks.

While President Fernández is a pragmatist and Guzmán a former technocratic scholar, Cristina Fernández is known for her inflammatory rhetoric against the IMF. She has previously claimed that the fund’s deal with Argentina was illegal and violated the IMF’s own rules because it financed capital flight, an argument the fund rejected.

Fund officials are said to be concerned that after more than three months of talks, little progress has been made. Some fear that once the agreement is signed, clashes will be inevitable as the election campaign approaches.

“There was a momentum [for a deal with the IMF] after the conclusion of the negotiation with private creditors last September, which the economic team lost, ”said Martín Redrado, former central bank governor, referring to the successful restructuring of $ 65 billion in bonds by the government last year.

“Although Argentina needs a comprehensive economic program to pave the way for sustainable growth, it seems that dragging its feet is convenient for both sides,” he added.



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