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ARGENTINA

Ricardo Quintela announced that La Rioja will not pay another bond maturity

La Rioja is the only Argentine province to default on its international creditors

La Rioja, the only province in default, confirmed that it will also not pay a bond maturity this Monday, which will prolong its payment default situation.

The ultra-Kirchnerist governor Ricardo Quintela has been in talks with creditors for a year and a half to restructure the debt, although he has not reached a definitive agreement.

In a statement addressed to the market, the provincial administration had announced that it will not make the payment due on Monday. This concerns the Green Bond, issued in 2017, intended to finance the Arauco Wind Farm, with a final maturity scheduled for 2028.

These securities, which were initially due in 2027, were restructured in 2021 after the provincial default recorded in 2020. The Green Bond accrues an annual interest rate of 8.5% and totals 318.4 million dollars. This new missed payment deepens the prolonged financial crisis that La Rioja is experiencing due to disastrous Kirchnerist management.

Man in a gray suit and blue tie smiling in front of two Argentine flags
The ultra-Kirchnerist governor Ricardo Quintela | La Derecha Diario

The only province in default

The authorities of La Rioja blamed the province's financial problems on an alleged scenario of "unprecedented economic challenges," an argument they use to explain the inability to meet their debt obligations.

In this context, La Rioja became the only Argentine province to fall into default with its international creditors. Although there were reports that other provinces could face similar problems, so far La Rioja remains the only one in default.

The provincial executive insists on the need for a restructuring that includes a reduction in the interest rate and an extension of payment terms. However, negotiations remain complex and a short-term resolution is not in sight.

Spokespersons for the Riojan government stated that the province "wants to pay and has a plan, but its absolute priority is to meet the needs of the community." In that sense, they reaffirmed that La Rioja keeps its "commitment to transparency, fiscal responsibility, and the defense of the interests of the people of La Rioja," something that is false given that they can't even pay their obligations.

Middle-aged man with a mustache and short hair, dressed in a blue suit and tie, smiling in an indoor setting with stairs in the background
The ultra-Kirchnerist governor Ricardo Quintela | La Derecha Diario

In 2024, the province was taken to court in New York by bondholders, who demanded payment of principal and interest. In August of that same year, creditors requested a summary judgment in the Southern District Court of New York.

The case of La Rioja caused particular controversy, since the province allocated most of the funds obtained from the placement of green bonds to finance the Arauco Wind Farm, through the state-owned company Parque Eólico Arauco S.A. Later, provincial authorities completed the sale of 100% of one of its subsidiaries, Vientos de Arauco Renovables, to Pampa Energía S.A. for an amount of 171 million dollars.

However, despite that extraordinary income, the province failed to meet its financial commitments, which led to strong criticism from creditors. As a result of these defaults, in September 2024 the United States judiciary issued a ruling ordering La Rioja to pay bondholders about 40 million dollars in damages.

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