The province of La Rioja, in Argentina, is once again the center of attention internationally due to a new default on the payment of its debt.
This Monday, the Kirchnerist government of Ricardo Quintela officially announced that it will not be able to meet the maturity of the international bonds linked to the Green Bond, issued in 2017 to finance the Arauco Wind Farm. This bond has its maturity date scheduled for 2028.
This default occurs in the context of a default process that the province has been dragging on for more than a year, during which the authorities have attempted to negotiate a restructuring with creditors.
Additionally, this demonstrates the failure of the "chachos," the Debt Cancellation Bonds (BOCADE) issued by the Government of La Rioja, which were subsequently eliminated, supposedly to "boost the provincial economy."
In a statement addressed to the markets, the Kirchnerist government of La Rioja explained that the default affects both the principal and the interest of the bonds whose service was scheduled for February 24.
"The province is in the process of negotiating with creditors for the restructuring of its debt," was highlighted in the official message. Meanwhile, the local Ministry of Finance assured that it will continue to inform investors about any progress in the negotiations.
These bonds, which originally matured in 2027, were restructured in 2021 following the provincial default of 2020. The Green Bond offers an annual yield of 8.5% and has a total value of 318.4 million dollars. This new default deepens the financial crisis that La Rioja is going through.
