PUBLIC DEBT RESTRUCTURING

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PUBLIC DEBT RESTRUCTURING

The Ministry of Economy moves forward on the process of hiring financial advisors

On February 14, 2020, the Ministry of Economy issued Resolution 71/2020, which contains the terms and conditions applicable to the approval and execution of contracts with third parties within the framework of Law No. 27,544.

Under such framework, the Secretariat of Finance announced the particular technical specifications that would rule the hiring of financial advisors and underwriters to work with the Government on the debt restructuring process.

The deadline for submitting proposals is next Thursday, February 20, 2020 at 5:00 p.m. Proposals should be sent by e-mail to [email protected].

Interested parties may send proposals to act as financial advisors or as underwriters, individually or jointly. Proposals submitted by more than one party acting as a consortium will not be accepted. However, the Ministry of Economy may require that two or more parties act jointly as a consortium, which must be accepted by the interested parties.

Proposals must include the general background of the interested party, its specific background, the members of its work team, the specific technical proposal and the economical proposal, which concepts will be weighed as follows: general background: 5%; specific background: 25%; work team: 25%; specific technical proposal: 25%; and economical proposal: 20%.

As to the economical proposal, it must respect the maximum amounts set forth in Section 4 of Law No. 27,544, as follows:

(i) financial advisor: 0.02% of the amount effectively exchanged and/or restructured;

(ii) underwriters: 0.08% of the amount effectively exchanged and/or restructured.

The proposals will be analyzed by the External Public Debt Sustainability Management Unit (“Unidad de Gestión de Sostenibilidad de la Deuda Pública Externa”), which must present an Eligibility Report (“Informe de Elegibilidad”) to the Economy Minister, who will be responsible for the final selection.

Click here to access Resolution 71/2020 (published in the Official Gazette on February 18, 2020, available only in Spanish).

Should you need any further information, please do not hesitate to contact Tomás M. Araya