Americas Core Credit: Argentina and Venezuela Discussion with Lee Buchheit (Feb. 2, 2020)
Feb 2, 2020
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Sovereign restructuring veteran Lee Buchheit discusses Argentina and Venezuela, highlighting the role of the IMF in Argentina's upcoming restructuring and exploring the history and significance of collective action clauses in bond restructuring. The podcast also delves into the intricacies of sovereign debt restructuring, emphasizing the importance of a sustainable debt position and examining success stories from Uruguay and Iraq.
PG&E might face a state takeover if it doesn't transform itself, according to Governor Newsom of California.
Frontier Communications is planning a bankruptcy filing in mid-March, involving equitization and refinancing of its debt.
Deep dives
PG&E and Governor Gavin Newsom's harsh words
Last week, Governor Gavin Newsom of California expressed strong criticism of PG&E, stating that if the entity is not, quote, transformatively different, a state takeover will be necessary. Counsel for PG&E, on the other hand, expressed confidence that they can address the governor's concerns through ongoing discussions and provided a timeline for the disclosure statement and plan voting deadlines.
Frontier Communications bankruptcy filing
Frontier Communications is preparing for a mid-March bankruptcy filing. The filing would involve partial equitization and takeback paper for unsecured noteholders of its $10.9 billion in hold code debt. The company's first and second lien debt and subsidiary debt would be refinanced or reinstated. Frontier is facing significant interest payments between February and April, including a $114.9 million coupon on its unsecured notes due in 2022 and a $198 million coupon due in 2025.
New US Senate bill on Intelsat auction incentive payments
US Senators John Kennedy, Maria Cantwell, and Brian Shatz introduced the SMART Act, a bill aimed at reallocating spectrum in the 3,700 to 4,200 MHz range, known as the C-band. The bill includes a provision to cap incentive payments for satellite companies, including Intelsat, to no more than $1 billion. The bill has bipartisan support and allocates funds for deficit reduction, 911 services, and rural wireless and broadband infrastructure.
U.S. Court of Appeals ruling on Puerto Rico
The U.S. Court of Appeals for the First Circuit issued an opinion affirming Judge Laura Taylor Swain's ruling on Section 552 of the bankruptcy code regarding post-petition revenue. The court concluded that liens granted to employee retirement system bondholders prior to the Title III bankruptcy case do not attach to revenue received during the post-petition period. Judge Swain scheduled a hearing on gating issues related to standing and security interests in revenue bonds for March.
The Americas Core Credit team at Reorg takes a look back at the past week and previews what's to come in the week ahead, and LatAm team lead Kyle Owusu has a discussion on Argentina and Venezuela with sovereign restructuring veteran Lee Buchheit.
If you are not a Reorg subscriber, request access here: go.reorg-research.com/Podcast-Trial.
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