SOURCE: Province of Nequen

April 04, 2011 18:14 ET

The Province of Neuquen Announces Commencement of Consent Solicitation

NEUQUEN, ARGENTINA--(Marketwire - April 4, 2011) - The Province of Neuquén (a province of Argentina) (the "Province") today announced that it has commenced a solicitation of consents (the "Consent Solicitation") from holders ("Holders") of its outstanding 8.656% Secured Amortizing Series 1 Notes due 2014 (CUSIPs P7920CAB4 and 64126BAA8; ISINs USP7920CAB48 and US64126BAA89) issued under the U.S.$250,000,000 Securities Provincial Development Program (Programa de Títulos de Deuda para el Desarrollo Provincial) (the "Notes") to the proposed amendments (the "Proposed Amendments") to the Notes and indenture, dated as of October 18, 2006 (the "Indenture") under which the Notes were issued. The purpose of the Consent Solicitation and the Proposed Amendments is to eliminate or amend certain provisions of the Indenture to permit the Province to incur additional secured and unsecured debt, including in the form of new debt securities. U.S.$250,000,000 original principal amount of Notes is outstanding, and the remaining principal amount due on the Notes is U.S.$139,000,000.

The Consent Solicitation will expire at 5:00 p.m., New York City time (6:00 p.m., Buenos Aires time), on April 14, 2011 unless the Province extends the expiration date in its sole discretion.

Approval of the Proposed Amendments requires receipt of consents (the "Consents") of the Holders of more than 50% of the outstanding aggregate principal amount of the Notes (the "Requisite Majority").

Upon successful completion of the Consent Solicitation and promptly after the Expiration Date (but in no event later than five business days following the Expiration Date), the Province will pay each holder as to which the Province has received a valid Consent the consent payment (the "Consent Payment") of U.S.$7.00 multiplied by the Scaling Factor (as defined below) for each U.S.$1,000 nominal principal amount of Notes, subject to the satisfaction of certain conditions and upon the terms set forth in a solicitation statement dated as of April 4, 2011, which has been prepared by the Province in connection with the Consent Solicitation (the "Solicitation Statement"). If the Consent Solicitation is earlier terminated, withdrawn or otherwise not consummated, or the conditions set forth in this Solicitation Statements are not met, the Consent Payment will not be paid or become payable and the Consents therefore received will be no longer valid.

The Scaling Factor is determined in accordance with market convention to convert from the nominal principal amount of the Notes to the remaining principal amount due after each principal repayment date. It shall be calculated as of the Expiration Date to reflect the Province's repayment of principal amounts under the Notes according to the amortization schedule of the Notes (the "Scaling Factor"). The Scaling Factor as of the scheduled Expiration Date will be 0.5560.

Barclays Capital Inc., Citigroup Global Markets Inc., Banco Macro S.A. and Puente Hnos. Sociedad de Bolsa S.A. are acting as solicitation agents for the Consent Solicitation. Questions regarding the Consent Solicitation may be directed to Barclays Capital Inc at +1 800 438 3242 (U.S. toll free) or +1 212 528 7581 (U.S. collect), Citigroup Global Markets Inc. at +1 800 558 3745 (U.S. toll free) or +1 212 723 6108 (U.S. collect), Banco Macro S.A. at +54 11 5222 6744 (Argentina), or Puente Hnos. Sociedad de Bolsa S.A. at +54 11 4329 0000 (Argentina).

Bondholders Communications Group is acting as the information and tabulation agent. Requests for documents may be directed to Bondholders Communications Group at +1 212 809 2663 (in the US) and +44 20 7382 4580 (in the UK) or may be accessed via the website www.bondcom.com/Neuquen.

This announcement must be read in conjunction with the Solicitation Statement. This announcement and the Solicitation Statement contain important information which should be read carefully before any decision is made with respect to the Consent Solicitation. If any Holder is in any doubt as to the action it should take, or is unsure of the impact of the implementation of the proposals which are the subject of the Consent Solicitation, it is recommended to seek its own financial advice, including in respect of any tax consequences, immediately from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the Consent Solicitation. None of the solicitation agents, the information and tabulation agent, or the Province makes any recommendation as to whether any Holder should participate in the Consent Solicitation.

THIS PRESS RELEASE IS NOT AN OFFER FOR SALE OF THE SECURITIES REFERRED TO HEREIN IN THE UNITED STATES OR IN ANY OTHER JURISDICTION WHERE SUCH OFFER IS PROHIBITED. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED.