Business Context and Reporting Period
This Form 6-K filing by Grupo Aval Acciones y Valores S.A. (Grupo Aval) is dated February 7, 2022. The filing announces a consent solicitation regarding two series of senior notes issued by its wholly-owned subsidiary, Grupo Aval Limited. The primary business context involves a planned corporate restructuring (Spinoff) of BAC Holding International Corp. (BHI), which owns BAC Credomatic Inc. (BAC). The consent solicitation is necessary to amend indenture restrictions that currently prohibit the disposal of shares in "Significant Subsidiaries," a category that includes BHI and BAC.
Key Financial Metrics and Debt Structure
The filing focuses on debt instruments rather than operational financial performance metrics such as revenue or profit. The following debt details are provided:
- 2022 Notes: 4.750% Senior Notes due 2022 with an outstanding principal of U.S.$1,000,000,000.
- 2030 Notes: 4.375% Senior Notes due 2030 with an outstanding principal of U.S.$1,000,000,000.
- Consent Fees: U.S.$2.00 per U.S.$1,000 of principal for the 2022 Notes; U.S.$7.00 per U.S.$1,000 of principal for the 2030 Notes.
- Liquidity and Cash Flow: The filing text does not provide specific values for operating cash flow, liquidity ratios, or current revenue/profit figures.
Material Changes and Proposed Amendments
The material change proposed is an amendment to the definition of "Significant Subsidiary" in the indentures governing the Notes. Currently, the indentures restrict Grupo Aval from disposing of share capital in Significant Subsidiaries. The proposed amendment seeks to exclude BHI, BAC, and their consolidated subsidiaries from this definition. This change is required to facilitate the Spinoff, where 75% of BHI's share capital will be distributed to shareholders of Grupo Aval and Banco de Bogotá S.A. (BdB) on a pro rata basis. Following the Spinoff, BdB will own 25% of BHI directly, and Grupo Aval will indirectly own approximately 17.2% of BHI.
Guidance, Risks, and Conditions
Conditions to Consummation: The consent solicitation and payment of fees are conditioned on:
- Receipt of "Requisite Consents" from holders of at least a majority in aggregate principal amount of each note series by the expiration date (February 18, 2022).
- Execution of supplemental indentures.
- Obtaining necessary regulatory approvals (substantially all of which have been obtained).
- Absence of laws or injunctions preventing the transaction.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ materially from expectations. A key contingency is that if requisite consents are not obtained for both series of notes, the solicitation will fail, no consent fees will be paid, and the amendment will not occur. Holders who do not consent will still be bound by the amendment if it becomes effective but will not receive the consent fee.
Investor Verification Checklist
- Verify the status of the consent solicitation and whether the requisite majority of holders for both the 2022 and 2030 Notes have consented by the February 18, 2022 deadline.
- Confirm the final ownership structure of BHI post-Spinoff, specifically the 25% direct stake by BdB and the indirect stake by Grupo Aval.
- Review the full Consent Solicitation Statement for detailed terms, as this press release is qualified in its entirety by that document.
- Monitor for any regulatory approvals that may still be pending despite the statement that "substantially all" have been obtained.
- Check for any legal challenges or injunctions that could invalidate the proposed amendment or the Spinoff.