Province of Chubut’s Series XLVIII Treasury Notes Issuance for AR$ 200,000,000
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent, in the issuance of Province of Chubut’s Series XLVIII Treasury Notes. The Treasury Notes Series XLVIII are secured by certain rights of the Province of Chubut to receive amounts under the federal tax co-participation regime and were issued for AR$ 200,000,000 fixed rate equivalents to 35.50% annual nominal, due on July 14, 2020.
Municipality of Cordoba’s Series XXXVII Treasury Notes Issuance for AR$ 600,000,000
Legal counsel to the Municipality of Cordoba, to Banco de la Provincia de Córdoba S.A., as arranger and placement, and to Puente Hnos. S.A., Banco de Servicios y Transacciones S.A., AdCap Securities Argentina S.A., Banco de la Ciudad de Buenos Aires and BACS Banco de Crédito y Securitización S.A., as placement agents, in the issuance of Municipality of Cordoba’s Series XXXVII Treasury, under the Municipality of Cordoba’s Treasury Notes Issuance Programme. The transaction settled on June 4, 2020 and the payments due under the Treasury Notes Series XXXVII are secured by certain rights of the raising of the Municipality for the contribution that affects the Commercial, Industrial and Services activity. The Treasury Notes Series XXXVII was issued for AR$ 600,000,000 variable rate equivalents to Badlar plus 6.99%, due on September 3, 2020.
Province of Chubut’s Series XLVII Treasury Notes Issuance for AR$ 340,810,000
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent, and to Puente Hnos. S.A. as placement agent, in the issuance of Province of Chubut’s Series XLVII Treasury Notes. The Treasury Notes Series XLVII are secured by certain rights of the Province of Chubut to receive amounts under the federal tax co-participation regime and were issued for AR$ 340,810,000 fixed rate equivalents to 32% annual nominal, due on June 26, 2020.
“RG Albanesi Serie X” Financial Trust for AR$ 730,000,000
Legal advisors of the trustor Rafael G. Albanesi S.A. in the issuance and placement in Argentina of AR$ 730,000,000 “RG ALBANESI SERIES X” Trust Securities, under the U$S 100,000,000 Global Trust Programme “RG ALBANESI”. TMF Trust Company (Argentina) S.A. acted as trustee, Banco de Servicios y Transacciones S.A. acted as arranger and placement agent; SBS Capital S.A. acted as arranger; and SBS Trading S.A. and BACS Banco de Crédito y Securitización S.A. acted as arrangers and placement agents.
Issuance of U$S 250,300,000 in Senior Notes by MSU Energy S.A. in the International and Argentine Market
Legal counsel to MSU Energy S.A., as Issuer, in the issuance of Senior Notes worth U$S250,300,000 with public offering, and due 2024. The offer was addressed to the Argentine and International Market under the exemptions provided in the US Securities Act of 1933, as amended. The Notes are listed on Bolsas y Mercados Argentinos S.A., and the Mercado Abierto Electrónico S.A. J.P. Morgan Securities LLC acted as Initial Purchaser; and Puente Hnos. S.A., as Local Placement Agent; Citibank, N.A. acted as Trustee, Paying Agent, Registrar and Transfer Agent; and the Argentine branch of Citibank, N.A. acted as Trustee in Argentina, Co-Registrar, Paying and Transfer Agent and Argentine Collateral Agent.
News in the Oil Upstream Sector: Argentina Fixes Local Crude Oil Reference Price
On May 19th, 2020, Decree No. 488/2020 (the “Decree”) has been issued by the National Executive, which fixes the local crude oil reference price locally produced and delivered (known as the Criollo or domestic barrel) at US$ 45 per barrel, with effects up to December 31st, 2020.
Furthermore, among other relevant matters, the Decree:
- Establishes a 0% rate for export duties if the international crude oil price is below US$ 45 per barrel.
- Foresees certain obligations for producing, trading and refining companies.
- Includes certain restrictions applicable for those companies in connection with the FX market.
- Limits the ability to import crude oil.
- Updates the values foreseen for penalties under the Hydrocarbon’s Law.
According to the Decree’s recitals, this measure is enacted in order to allow oil producing companies to cover operational costs and sustain the activities and/or production levels prevailing prior to the beginning of the epidemiological crisis, taking into account the current demand shrinkage caused by COVID-19. In addition, the Decree holds a special consideration to the strategic dimension of non-conventional hydrocarbons production in Vaca Muerta.
Below is a summary of the Decree’s most relevant aspects:
1. Domestic oil barrel price
The Decree is effective immediately and the domestic price set forth therein is valid until December 31st, 2020, unless as stated below.
Crude oil produced and delivered in the local market shall be invoiced by producing companies and paid by refining and trading companies considering the Medanito crude type oil price of US$ 45 per barrel (US$ 45/bbl) as reference. This price shall be adjusted concerning each crude type for quality and charging port, according to the usual practice in the local market, and shall also be applicable for payment of royalties to Provinces.
Should at any time the “ICE BRENT PRIMERA LÍNEA” price exceed US$ 45 per barrel for ten days in a row, the domestic price established by the Decree shall cease to be in effect.
2. Obligations of the producing companies
While the domestic price is in force, producing companies are compelled to:
- Sustain the activity and/or production levels registered during 2019, taking into consideration current local and international demand shrinkage, and always within the adequate and economic operation parameters established in article 31 of Law No. 17,319.
- Comply with the regional services contracts and maintain the employee payroll which was in place in December 31st, 2019.
3. FX restrictions
During the validity term of the domestic oil barrel price, the producing companies which benefit from such price, shall not be able to access the FX market for the structuring of foreign assets nor have the ability to operate in the blue chip swap market.
4. Refining and trading companies’ obligations
The refining and trading companies shall purchase the total crude oil demand to local producing companies, considering the crude quality required by the refining processes and in accordance with the price established in the Decree. For integrated companies, the purchase shall be held with 2019-standards if the crude acquisition exceeds their own production and the subsidiary ones.
Companies shall not be able to import products available in the local market.
5. Export duties for oil and derivatives
For the calculation of the rate applicable for export duties, the Executive Power sets the following “ICE Brent primera línea” values: a) Base Value (“VB” in Spanish): US$ 45 per barrel; b) Reference Value (“VR” in Spanish): US$ 60 per barrel; and c) International Price (“PI” in Spanish): the one published the last business day of every month by the Secretary of Energy, based on the last (5) “ICE Brent primer línea” prices” taken from the “Platts Crude Marketwire” with the “Future Settlements” heading.
For those purposes, the last business day of every week, the Secretary of Energy shall assess the monthly average prices and, if the difference between that price and the actual valid price were to exceed 15%, it shall establish a new price, which shall enter into force the following business day.
Accordingly, the Decree stipulates a 0% rate for duty exports when the International Price is equal or lower than the Base Value.
On the contrary, if the price is equal or higher compared to the Reference Value, the duty rate shall be set forth in 8%. Otherwise, if the International Price were to be higher than the Base Value and lower than the Reference one, the rate shall be determined through the following formula: Duty rate = {PI-VB/VR-VB} x 8%.
6. Taxes.
The increase on Liquid Fuel and Carbon Dioxide Taxes pursuant the updates corresponding to the first and second trimester of 2020 shall enter into force for unleaded and virgin oil, and gas oil as of October 1st, 2020.
7. Updates on fines values
Fines that may be imposed by the concession grantor under Law No. 17,319 have been updated, whereby the new fine values established are the following: minimum amount equivalent to the value of 22 m3 of the national crude oil in the local market and a maximum amount equivalent to 2.200 m3 of the same hydrocarbon for every breach.
8. Delegation of powers to the Secretary of Energy
The Executive Power has awarded the Secretary of Energy the authority to modify the crude oil prices foreseen in the Decree on a quarterly basis, as well as to periodically revise the extent of this measure pursuant the production volume and levels of activity and investment.
Likewise, the Secretary of Energy shall verify the non-realization of monopolistic conducts by every subject of the oil chain of production. To exercise this supervision authority, this public body shall consider objective standards of production and shall consider the consequences provoked by COVID-19 pandemic.
An interview made by the Law Journal of Universidad San Andres (Revista Jurídica de la Universidad de San Andrés) to our partner Nicolás Eliaschev including further analysis and opinion about the Decree can be accessed by clicking or tapping here (in Spanish).
For further information, please contact Nicolás Eliaschev and/or Javier Constanzó.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
Province of Chubut’s Series XLVI Treasury Notes Issuance for AR$ 100,000,000
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent in the issuance of Province of Chubut’s Series XLVI Treasury Notes. The Treasury Notes Series XLVI are secured by certain rights of the Province of Chubut to receive amounts under the federal tax co-participation regime and were issued for AR$ 100,000,000 fixed rate equivalents to 26.50% annual nominal, due on July 14, 2020.
COVID-19: Standards for Electricity Distribution
On May 16th, 2020, Resolution No. 35/2020 (the “Resolution”) was published in the Official Gazzette, in which the Electricity Regulatory Authority–in Spanish Ente Nacional Regulador de la Electricidad–(“ENRE”) authorizes certain EDENOR and EDESUR users reached by the mandatory isolation measures established by Decree No. 297/2020 (as amended) to either suspend payments or make partial payments on account of the contracted capacity through supply agreements; or otherwise, to terminate the contract or require an amendment.
1. Benefited users and periods comprised
EDENOR and EDESUR users belonging to categories T2, T3 and Toll (i.e. medium to large users) whose power demand was reduced in 50% or more as a result of isolation measures, may resort to the alternatives provided in the Resolution for payments accrued since March 20th, 2020 and pending subsequent periods.
2. Benefit’s extension and payment facilities
For users which have opted to whether suspend or make partial down payments, this benefit will terminate when the demand recovery reaches 70% of its contracted capacity. In addition, users who resort to this option shall pay debt accrued pursuant to criteria to be determined by ENRE.
3. Distribution companies’ obligations
Distribution companies shall communicate to users the extent of the different options authorized and refer a weekly report to ENRE with the contractual suspensions, modifications and/or terminations based on the Resolution.
For further information, please contact Nicolás Eliaschev and/or Javier Constanzó.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
The Superintendence of Corporations Continues to Tighten Controls on Simplified Companies
Following the trend adopted by the Superintendence of Corporations (“Superintendence”) this year regarding Simplified Companies (“SAS”), on May 6, General Resolution 22/2020 (“RG IGJ 22/2020”) was published in the Official Gazette, which tightens the level of supervision for this type of company.
The RG IGJ 22/2020 provides mechanisms for obtaining information and measures to determine the business development of the SAS, registered both in the public registry of the City of Buenos Aires ("CABA") and other local jurisdictions, in relation to the ownership by this type of companies of property rights over real estate located in the CABA. The intention of the regulator would be to be able to determine if said ownership is alien to the corporate purpose. For this, the resolution provides for collaboration between the Superintendence and the Registry of Real State of the City of Buenos Aires, to obtain information on the existence of transactions regarding real estate rights in which the acquirers, creditors or assignees, fully or acting as trustees, are SAS.
If, based on such information, the regulator determines that those properties are not related to the development or financing of an organized economic activity of production of goods and services conducted by the SAS, the Superintendence will promote -or entrust the Public Ministry Prosecutor- the corresponding legal actions to declare the disregard of the legal entity. In turn, the Superintendence will be empowered to adopt additional measures if it deems it necessary.
In the same sense, note that on May 4, the Superintendence published General Resolution 20/2020, through which it modified article 38 of General Resolution 6/2017, establishing that for the registration of the appointment of administrators, those who are domiciled abroad must file the powers-of-attorney granted to their representatives, which may only be granted in favor of the directors of the residing in the Argentine Republic.
We also refer to our other Newsletters (see General Resolution IGJ 9/2020 and General Resolution IGJ 17/2020) in relation to the latest regulations applicable to SAS.
For further information, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, Agustín Griffi, or corporateteam@trsym.com.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
Province of Chubut’s Series XLV Treasury Notes Issuance for AR$ 52,253,500
Legal counsel to Banco del Chubut S.A., as arranger, placement and financial agent in the issuance of Province of Chubut’s Series XLV Treasury Notes. The Treasury Notes Series XLV are secured by certain rights of the Province of Chubut to receive amounts under the federal tax co-participation regime and were issued for AR$ 52,253,500 fixed rate equivalents to 25.50% annual nominal, due on June 22, 2020.