Argentina’s IEBA Says It Missed Payment on $135 Million Bonds

Inversora Electrica de Buenos Aires SA, the Argentine electricity distributor with the second most outstanding bonds, missed interest payments due last week for two bonds totaling $135 million, the company said.

IEBA, whose only source of cash is EDEA SA, an electricity distributor based in Argentina’s coastal city of Mar del Plata, didn’t provide a reason for having missed payments due on Dec. 26 in its note sent to the Buenos Aires stock exchange today.

EDEA won’t get a tariff increase in 2015 as the province renewed today an accord with the federal government to continue to freeze rates. EDEA, which has 500,000 clients, was facing a cash shortage after Argentina devalued its currency last January when the province of Buenos Aires first agreed to freeze tariffs.

IEBA owner Alejandro Macfarlane, who bought a controlling stake in October, hired former Barclays Plc director Roberto Helbling to renegotiate terms on the company’s bond in November. He also hired law firm Errecondo, Gonzalez & Funes for the restructuring effort.

The bonds, issued in 2007 when the company emerged from a 5-year default, have fallen to 34 cents on the dollar from 44 cents at the beginning of the year. Moneda Asset Management, based in Santiago, owns 9.4 percent of IEBA’s notes, according to data compiled by Bloomberg.

Macfarlane was chairman of Empresa Distribuidora & Comercializadora Norte, Argentina’s largest electricity distributor known as Edenor and the utility with the most bonds outstanding, from 2005 until 2012.

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