IRSA Announces Commencement of Exchange Offer for Any and All of its 8.750% Senior Notes due 2028

Rhea-AI Summary

IRSA has launched an exchange offer for its outstanding 8.750% Senior Notes due 2028, with a current aggregate principal amount of US$141,242,322.38. The company is offering to exchange these notes for new 8.000% Senior Notes due 2035.

Eligible holders who tender their notes by the Early Participation Date (March 24, 2025) will receive US$1,040 in new notes for each US$1,000 of existing notes. Those who tender after this date but before the Expiration Date (April 8, 2025) will receive US$1,000 in new notes for each US$1,000 of existing notes.

The early settlement is expected on March 31, 2025, with final settlement anticipated on April 11, 2025. The offer includes accrued and unpaid interest from December 22, 2024, to the settlement date.

Positive

• Lower interest rate on new notes (8.000% vs 8.750%)
• Early participation bonus of US$40 per US$1,000 of notes exchanged
• Extended maturity to 2035 improves debt profile

Negative

• Holders not participating may face reduced liquidity in existing notes
• Argentine Entity Offerees may be subject to tax withholdings

Insights

Financial Analyst

IRSA's announced exchange offer for its $141.2 million in outstanding 8.750% Senior Notes represents a strategic debt refinancing that strengthens its financial position. The company is offering to extend the maturity of these obligations from 2028 to 2035 while simultaneously reducing the interest rate to 8.000%.

This transaction offers multiple financial benefits. First, by extending maturities by seven years, IRSA gains significant breathing room on its debt repayment schedule. Second, the 0.75% interest rate reduction will generate meaningful annual interest savings. Third, the early participation incentive (offering $1,040 in new notes per $1,000 of existing notes) is structured to encourage high participation rates.

The voluntary nature and timing of this exchange offer signals proactive financial management rather than distress. By refinancing well ahead of the 2028 maturity, IRSA demonstrates forward-thinking capital management and takes advantage of current market conditions to secure longer-term financing at a more favorable rate.

This move aligns with prudent liability management strategies we've seen from other Latin American corporate issuers seeking to extend debt profiles amid economic uncertainty. The transaction will enhance IRSA's financial flexibility, potentially improving debt coverage ratios and freeing up capital for operations or strategic initiatives.

Capital Markets Specialist

IRSA's debt exchange offer delivers meaningful improvements to its capital structure through a carefully designed transaction mechanism. The offer targets complete refinancing of its 2028 notes, pushing maturities out to 2035 while capturing interest rate savings.

The structure features sophisticated incentives to drive participation, particularly the early tender premium that rewards prompt action. This approach maximizes the likelihood of high participation rates, allowing for more comprehensive liability management. The exchange terms provide sufficient economic incentive for bondholders to participate without creating excessive dilution for the company.

Market conditions appear favorable for this transaction, as IRSA is offering bondholders extended duration in exchange for a modest rate concession. The $40 premium per $1,000 principal for early participants efficiently balances stakeholder interests - providing enough value to motivate noteholders while preserving company resources.

For Argentine corporate issuers, securing long-term dollar financing at single-digit rates represents a significant achievement given the country's historical volatility. By extending maturity to 2035, IRSA significantly reduces refinancing risk and creates a more sustainable debt profile that can weather potential market disruptions or economic cycles, potentially supporting improved credit metrics over time.

BUENOS AIRES, Argentina, March 10, 2025 /PRNewswire/ -- IRSA Inversiones y Representaciones Sociedad Anónima, a corporation (sociedad anónima) incorporated under the laws of the Republic of Argentina ("IRSA"), today announced it has commenced, subject to the terms and conditions set forth in the exchange offer memorandum dated March 10, 2025 (the "Exchange Offer Memorandum" and, together with the Eligibility Letter, as defined below, the "Exchange Offer Documents") an offer (the "Exchange Offer") to Eligible Holders (as defined below) to exchange any and all of its US$141,242,322.38 aggregate principal amount of outstanding 8.750% Senior Notes due 2028 (the "Existing Notes") for 8.000% Senior Notes due 2035 (the "New Notes") to be issued by IRSA.

The following table sets forth certain material terms of the Exchange Offer:

Existing Notes			Exchange Consideration(3)
Description	CUSIP and ISIN (144A / Reg S)	Principal Amount Outstanding(2)	Early Exchange Consideration (Principal Amount of New Notes)(4)	Late Exchange Consideration (Principal Amount of New Notes)
8.750% Senior Notes due 2028(1)	CUSIPs: 450047AH8/ P58809BH9   ISINs: US450047AH86/ USP58809BH95	US$141,242,322.38	US$1,040	US$1,000

(1) The Existing Notes are listed on the Buenos Aires Stock Exchange (Bolsas y Mercados Argentinos S.A.) and traded on the Argentine over the counter market (Mercado Abierto Electrónico S.A., or the market that supersedes it (including A3 Mercados S.A.)). Includes approximately US$7.9 million Notes held by IRSA and its subsidiaries.
(2) The original principal amount outstanding of the Existing Notes is subject to a variable amortization factor (the "Amortization Factor") which is calculated in accordance with amortization payments made and expected to be made in accordance with the terms and conditions of the Existing Notes. As of the date of the Exchange Offer Memorandum, the Amortization Factor is 0.825, which multiplied by the nominal amount of the Notes shown in the records of the relevant clearing system (the original principal amount of the Existing Notes) results in US$141,242,322.38.  The original principal amount of the 2028 Senior Notes before the application of the Amortization Factor is US$171,202,815.
(3) Per US$1,000 principal amount of the Existing Notes validly tendered and accepted for exchange. The Exchange Consideration does not include accrued and unpaid interest with respect to the Existing Notes accepted for exchange, which shall be paid together with the applicable Exchange Consideration as described herein.

The Exchange Offer will expire at 5:00 p.m. (New York City time) on April 8, 2025 (such date and time, as the same may be extended in the sole discretion of IRSA, the "Expiration Date"). Existing Notes tendered for exchange may be validly withdrawn at any time at or prior to 5:00 p.m. (New York City time) on March 24, 2025 (such date and time, as the same may be extended in the sole discretion of IRSA, the "Withdrawal Date"), but not thereafter. To be eligible to receive the Early Exchange Consideration, Eligible Holders must validly tender and not validly withdraw their Existing Notes at or prior to 5:00 p.m. (New York City time) on March 24, 2025 (such date and time, as the same may be extended in the sole discretion of IRSA, the "Early Participation Date"). The deadlines set by any intermediary or relevant clearing system may be earlier than these deadlines.

Exchange Consideration

Upon the terms and subject to the conditions set forth in the Exchange Offer Documents, Eligible Holders who validly tender Existing Notes, and whose Existing Notes are accepted for exchange by IRSA, will receive:

(a) if they tender their Existing Notes on or before the Early Participation Date, US$1,040 principal amount of New Notes for each US$1,000 principal amount of Existing Notes validly tendered that we accept for exchange (the "Early Exchange Consideration") which includes the Early Tender Premium; and
(b) if they tender their Existing Notes after the Early Participation Date but on or before the Expiration Date, US$1,000 principal amount of New Notes for each US$1,000 principal amount of Existing Notes validly tendered that we accept for exchange (the "Late Exchange Consideration" and, together with the Early Exchange Consideration, the "Exchange Consideration").

The Condition

Upon the terms and subject to the conditions of the Exchange Offer described in the Exchange Offer Memorandum, which are for the sole benefit of IRSA and may be waived by IRSA, in full or in part, in its absolute discretion, IRSA will accept for exchange as soon as reasonably practicable after the Early Participation Date, all Existing Notes validly tendered at or prior to the Early Participation Date and not validly withdrawn as of the Withdrawal Date in the Exchange Offer.

IRSA expects, on March 31, 2025, which is the fifth business day after the Expiration Date (as may be extended by IRSA in its sole discretion, the "Early Settlement Date"), to issue and deliver the applicable principal amount of New Notes and deliver the applicable Early Exchange Consideration in exchange for any Existing Notes validly tendered and not validly withdrawn and accepted for exchange, in the amount and manner described in the Exchange Offer Memorandum. Any final settlement of the Exchange Offer will be promptly following the Expiration Date and is expected to be April 11, 2025, which is the third business day after the Expiration Date (as the same may be extended by IRSA). IRSA will not be obligated to issue or deliver New Notes with respect to the Exchange Offer unless the Exchange Offer is consummated. Eligible Holders of the Existing Notes who are Argentine Entity Offerees (as defined in the Exchange Offer Memorandum) or Non-Cooperating Jurisdiction Offerees (as defined in the Exchange Offer Memorandum) may be subject to certain tax withholdings resulting from the exchange of their Existing Notes. See "Taxation—Certain Argentine Tax Considerations" in the Exchange Offer Memorandum.

Holders of Existing Notes validly tendered for exchange and not validly withdrawn and accepted by IRSA pursuant to the Exchange Offer will be entitled to receive accrued and unpaid interest paid in cash with respect to the Existing Notes accepted for exchange which consists of a cash payment equal to all accrued and unpaid interest (rounded to the nearest cent US$0.01) on their Existing Notes accepted for exchange from the interest payment date on December 22, 2024 to, but not including, the Early Settlement Date or the Final Settlement Date, as the case may be  (net of accrued interest on the New Notes in the case of consideration paid on the Final Settlement Date only). Under no circumstances will any additional interest be payable because of any delay in the transmission of funds to Eligible Holders by DTC, Euroclear, Clearstream or any other clearing system.

The New Notes are being offered for exchange only (1) to holders of Existing Notes that are "qualified institutional buyers" as defined in Rule 144A under U.S. Securities Act, as amended (the "Securities Act"), in a private transaction in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof and (2) outside the United States, to holders of Existing Notes other than "U.S. persons" (as defined in Rule 902 under the Securities Act, "U.S. Persons") and who are not acquiring New Notes for the account or benefit of a U.S. Person, in offshore transactions in compliance with Regulation S under the Securities Act. Only holders who have properly submitted a duly completed electronic Eligibility Letter by accessing the Eligibility Letter Website: https://projects.sodali.com/IRSAEligibility, which is also available from the Information and Exchange Agent, are authorized to receive and review this Exchange Offer Memorandum and to participate in the Exchange Offer (such holders, "Eligible Holders").

The Exchange Offer is subject to certain conditions as described in the Exchange Offer Memorandum (including, without limitation, the Financing Condition) which are for the sole benefit of IRSA and may be waived by IRSA, in full or in part, in its absolute discretion. Although IRSA has no present intention to do so, it expressly reserves the right to amend or terminate, at any time, the Exchange Offer and to not accept for exchange any Existing Notes not theretofore accepted for exchange. IRSA will give notice of any amendments or termination if required by applicable law.

If you do not exchange your Existing Notes or if you tender Existing Notes that are not accepted for exchange, they will remain outstanding. If IRSA consummates the Exchange Offer, the trading market for your outstanding Existing Notes may be significantly more limited. For a discussion of this and other risks, see "Risk Factors" in the Exchange Offer Memorandum.

This press release is qualified in its entirety by the Exchange Offer Documents.

None of IRSA, the Dealer Managers, the Argentine Placement Agents, The Bank of New York Mellon, as trustee with respect to the Existing Notes (the "Existing Notes Trustee"), Banco Santander Argentina S.A., as the representative of the Existing Notes Trustee in Argentina, The Bank of New York Mellon, as trustee with respect to the New Notes, or the Information and Exchange Agent makes any recommendation as to whether or not Eligible Holders of Existing Notes should exchange their Existing Notes in the Exchange Offer.

Neither the delivery of this announcement, the Exchange Offer Documents nor any purchase pursuant to the Exchange Offer shall under any circumstances create any implication that the information contained in this announcement or the Exchange Offer Documents is correct as of any time subsequent to the date hereof or thereof or that there has been no change in the information set forth herein or therein or in IRSA's affairs since the date hereof or thereof.

This press release is for informational purposes only and does not constitute an offer or an invitation to participate in the Exchange Offer. The Exchange Offer is being made pursuant to the Exchange Offer Documents (and, to the extent applicable, the local offering documents in Argentina), copies of which will be delivered to holders of the Existing Notes, and which set forth the complete terms and conditions of the Exchange Offer. Eligible Holders are urged to read the Exchange Offer Documents carefully before making any decision with respect to their Existing Notes. The Exchange Offer is not being made to, nor will IRSA accept exchanges of Existing Notes from holders in any jurisdiction in which it is unlawful to make such an offer.

***

Morrow Sodali International LLC, trading as Sodali & Co, is acting as the exchange agent and as the information agent (the "Information and Exchange Agent") for the Exchange Offer. Citigroup Global Markets Inc., Santander US Capital Markets LLC, BCP Securities, Inc., Latin Securities S.A. Agente de Valores and Balanz Capital UK LLP are acting as Dealer Managers (the "Dealer Managers") for the Exchange Offer.

For further information about the Exchange Offer, please log into the website https://projects.sodali.com/IRSAEligibility. Alternatively, please contact the Information and Exchange Agent by email at IRSA@investor.sodali.com. Requests for documentation should be directed to the Information and Exchange Agent.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to IRSA's expectations regarding the performance of its business, financial results, liquidity and capital resources, contingencies and other non-historical statements. You can identify these forward-looking statements by the use of words such as "believes," "expects," "potential," "continues," "may," "may have", "will," "would," "should," "seeks," "approximately," "potential", "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks, uncertainties and assumptions. These statements should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in the Exchange Offer Documents. IRSA undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Media Contact:

IRSA Inversiones y Representaciones Sociedad Anónima
Carlos M. Della Paolera 261, 9th Floor (C1001ADA)
City of Buenos Aires
Argentina

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SOURCE IRSA Inversiones y Representaciones S.A.

FAQ

What is the exchange ratio for IRSA's 2028 notes tendered before the Early Participation Date?

Holders will receive US$1,040 in new 2035 notes for each US$1,000 of existing 2028 notes tendered by March 24, 2025.

When does IRSA's 2028 notes exchange offer expire?

The exchange offer expires at 5:00 p.m. New York City time on April 8, 2025.

What is the interest rate difference between IRSA's existing and new notes?

The existing notes carry 8.750% interest while the new 2035 notes will have an 8.000% interest rate.

What is the total principal amount of IRSA notes eligible for exchange?

US$141,242,322.38 aggregate principal amount of 8.750% Senior Notes due 2028 are eligible for exchange.