Experience
Restructuring of Bank Debt by Pipeline Operator
International Finance Corporation
Chadbourne represented International Finance Corporation (IFC) in the restructuring by Transportadora de Gas del Norte S.A. (TGN) of approximately $600 million in bank debt and Rule 144A and Regulation S Notes. TGN is an Argentine operator of natural gas pipelines.
As part of the restructuring, TGN prepaid IFC approximately $18 million for 100% of the 10.66% Series C Notes and Series D Notes of TGN, approximately $10 million for 75% of the 9.52% Series A Notes of TGN and the portion of the 9.45% Series B Notes of TGN beneficially owned by IFC. The launch by TGN of a restructuring offer, supported by 81% of its creditors, marked the end of a 5-year restructuring negotiation for the lawyers working on the project.
On August 3, 2006, TGN launched an exchange offer combined with a solicitation for consents to the restructuring through an Argentine Acuerdo Preventivo Extrajudicial (out-of-court restructuring agreement) of its remaining financial indebtedness. The prepayment of the IFC debt was complicated by the structure of the original IFC transaction pursuant to which nearly all of the approximately $211 million of Series B Notes were sold to investors through the issuance of trust certificates by a special purpose trust established to own a 100% participation in the Series B Notes held of record by IFC. As a result, the prepayment required obtaining the unanimous consent of these trust certificate holders, many of whom also held other types of TGN's debt instruments.
TGN is currently one of the two largest transporters of natural gas in Argentina, delivering approximately 41% of the country’s total gas consumption and 54% of Argentine total gas exports. The controlling shareholder of TGN is Gasinvest, whose shares are held by Petronas Argentina S.A., TecGas N.V, Total Gas y Electricidad Argentina S.A., Transcogas Inversora S.A., Total Gasandes and Compañía General de Combustibles S.A. Chadbourne previously represented the lenders' committee of Transportation de Gas del Sur S.A. (TGS) in a $1.02 billion debt restructuring that closed in December 2004.
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