Project Bonds

On June 26, 2018, the Argentine Securities and Exchange Commission ( “CNV” after its acronym in Spanish) published General Resolution No. 747/2018 (“Resolution No. 747”) in the Official Gazette, which creates a special system for the issuance of negotiable obligations aimed at financing both public and private projects of any nature through the Capital Market. This system, internationally known as “Project Bonds”, will be governed by a special information regime and will include the benefits provided in Law No. 23,576 of Negotiable Obligations as amended.

Negotiable obligations must be issued by companies incorporated with the sole purpose of carrying out those projects. That is to say, they must not develop any other activity other than that, and the repayment source will depend exclusively on the funds generated by said projects. Moreover, due to the characteristics of the investment, the authorized issuances must be exclusively aimed at qualified investors.

In accordance with Resolution No. 747, projects to be financed have to be carried out within the Argentine territory and may be at any stage of the process, such as design, development, or construction, or may even be debt restructuring projects. The general characteristics of the projects must be provided in the incorporation articles of the company and once the first issuance of negotiable obligations is registered, new projects that are not part of the initial project must not be included, except as otherwise provided.

Said resolution was previously analyzed through the “Participative Rule-Making” procedure (Executive Order No. 1172/2003), in which some of the suggestions and comments provided by the general public were taken into account.