REG - Burford Capital Ltd - Burford Capital Further Statement on YPF

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RNS Number : 5942Y  Burford Capital Limited  30 March 2026

 

March 30, 2026

 

 

Burford Capital Further Statement on YPF Appeal Decision

 

Burford Capital Limited ("Burford"), the leading global finance and asset
management firm focused on law, today provides a further statement on the YPF
decision in the United States Court of Appeals for the Second Circuit (the
"Second Circuit" or the "Court").

 

We have unsurprisingly received many questions from investors following
Friday's decision in the YPF matter. Given the communications constraints of
Regulation FD and the impending quarterly reporting period, we have compiled a
number of frequently posed questions along with our responses, to ensure
equality of information in the market.

 

Before turning to those questions, Christopher Bogart, Burford's Chief
Executive Officer, commented:

 

"We understand ― and share ― the market's disappointment with Friday's
court decision regarding YPF. While we are optimistic about an eventual
positive outcome in the case given the availability of international
arbitration, we recognize that represents a meaningful delay in expected cash
proceeds and affects investors' views about Burford's present value.

 

"Although the outcome was disappointing, we have always treated YPF as
separate and apart from Burford's core business. Burford is run on a cash
basis, and does not rely, or count on, cash from the YPF case to operate the
business; YPF has always been additional to the core business, and we have
repeatedly described it that way.

 

"Our core business is based on a portfolio of many hundreds of valuable cases
― a portfolio we expect to produce more than $5 billion in cash proceeds
over time and that produced more than $1.2 billion in cash in just the last
two years. We calibrate our commitments and deployments to new business based
on our cash on hand ― which today exceeds $700 million ― and our expected
cash generation from the portfolio. We have always presented the portfolio on
an ex-YPF basis, and we have never relied on cash proceeds from YPF to fund or
grow the core business. The core business is healthy, growing well and has
produced consistently high asset returns.

 

"While the YPF decision will have a negative non-cash impact on the GAAP
carrying value of the YPF asset, it will have no cash impact, and our core
business is unaffected. With our significant liquidity we remain well placed
to continue investing in and growing our core business, exploiting our market
leadership role.

 

"We are sensitive that we now have more debt than the level we previously
suggested was ideal. That said, we believe we are still not highly leveraged,
we have carefully laddered our debt maturities to stretch out over the next
eight years, and managing our debt load will be front of mind as we proceed.
Given our strong cash position and our expected cash proceeds from our
portfolio, we remain confident in our ability to achieve both continued growth
and debt rationalization."

 

Q:  What happens next in the US court process?

 

A:  We provided a detailed outline of the process and a sample timeline in
our October 22, 2025 release. In brief, although no decision has been reached,
we anticipate that the plaintiffs will seek rehearing en banc from the Second
Circuit. In that process, a party essentially asks the entire circuit court to
re-hear the appeal that was originally decided by just a three-judge panel.
Different circuit courts have varying levels of willingness to hear matters en
banc; the Second Circuit rarely does so. If the plaintiffs do not secure
relief in the en banc process, we expect that they will then seek certiorari
(leave to appeal) from the Supreme Court of the United States, although the
Court declines most such applications.

 

Q:  Tell us more about the arbitration alternative.

 

A:  Argentina is party to a number of bilateral investment treaties,
including with Spain (relevant to Petersen) and the US (relevant to Eton
Park). Those treaties provide for compensation to be paid to investors upon
the expropriation of their assets or in the absence of fair and equitable
treatment. Burford has longstanding expertise in bilateral investment treaty
arbitration, including in a prior successful claim against Argentina.

 

Friday's court decision said that even though Argentina clearly breached the
promise it made in the YPF bylaws to induce investors to buy YPF shares,
Argentine law did not permit plaintiffs to bring a private law contract suit
against Argentina as a fellow shareholder for refusing to make the promised
tender offer when it expropriated 51% of the company. Under the applicable
investment treaties, the relevant question is not whether there is a private
law action available to shareholders under Argentine law following Argentina's
takeover of YPF, but whether Argentina made and broke a promise to foreign
investors to induce them to invest in an Argentine company, thereby
frustrating their legitimate expectations, acting arbitrarily and depriving
them of the value of their investment and protections guaranteed by the tender
offer mechanism.

 

We believe there are viable arbitration claims here. Such claims will likely
be brought before the International Centre for Settlement of Investment
Disputes, which is an agency of the World Bank. More information about ICSID
can be found at: https://icsid.worldbank.org/ (https://icsid.worldbank.org/) .
The duration of such an arbitration is uncertain given the extensive record
already developed in the US litigation, which might abbreviate the process,
but like any complex litigation, it would be a multi-year process.

 

Q:  What is going to happen to the carrying value of the case in the interim?

 

A:  Burford's valuation policy generally calls for a substantial write-down
of an asset following an appellate loss, and we would expect a substantial
write-down in this instance. We will be working over the next month to
determine precisely how to determine the fair value of the YPF asset as at
March 31, 2026 and will provide full details of its revised carrying value
when we release our first quarter results in the first half of May.

 

Q:  Are you concerned about Burford's liquidity?

 

A:  No. The YPF case has not provided any cash to Burford since 2019, and
Burford did not rely on the case providing cash at any particular point in the
future, given the complexity of the litigation and the vagaries of enforcing
against Argentina. Burford has long operated and organized its affairs without
relying on a cash contribution from this case.

 

Burford has more than $700 million in cash, cash equivalents and marketable
securities on hand and a portfolio that routinely and reliably delivers cash
proceeds, and we continue to expect the portfolio to deliver billions of
dollars of cash in the years to come ― again, entirely without reference to
YPF.

 

Q:  Does this alter your plans to double the size of the core portfolio by
2030?

 

A:  No. The litigation finance business is an attractive asset class, we are
the market leader, and we plan on continuing to grow. Our existing growth
plans did not rely on debt to fund any additional growth in the short to
medium term, and so we expected ― and continue to expect ― to maintain our
growth trajectory with our cash on hand and the proceeds from our large
portfolio.

 

Investors may find interesting some of the content from our management meeting
in January 2026, where we enunciated three key goals ― to double the
portfolio by 2030, to bring in cash from the portfolio and to use technology
smartly, all to generate a 20% ROE. And we said explicitly: "And we need to
get there without any more borrowing". That is the path we are on and the path
we intend to follow.

 

Q:  How do your bond covenants work?

 

A:  Burford's only outstanding debt was issued in the US 144A market. Until
recently, we also had debt issued in the English market, which came with quite
a different structure and covenant package, but the English debt has now been
retired. Thus, it is important when looking at any antecedent Burford
documents or filings, to focus solely on the 144A debt.

 

Our 144a debt is all unsecured and does not have financial covenants that we
are obliged to maintain; we are not, for example, subject to a maximum
debt/equity ratio or any such concept. Rather, our debt only has "incurrence
covenants" that restrict our ability to incur additional debt or take certain
other actions, with enumerated exceptions (including exceptions tied to our
financial condition); a substantial write-down of YPF could limit our ability
to use some of those exceptions. We are not concerned about the impact of the
incurrence covenants on our ability to operate the business, and in any event,
we were not planning to expand the amount of debt we have outstanding in the
short to medium term. The incurrence covenants do not prevent us from
refinancing existing debt; they merely restrict our total debt level from
increasing by a substantial amount.

 

Our debt also does not create any restrictions on our ability to operate and
organically grow our litigation finance business, including entering into new
commitments and making new deployments. (Our debt indentures are all public
documents and can be found on Burford's investor relations website accessible
at http://investors.burfordcapital.com (http://investors.burfordcapital.com)
.)

 

We have long said that we do not believe it is prudent for us to use debt to
repurchase shares, which continues to be our position regardless of the share
price and however much we may disagree with the market's assessment of the
underlying value of our business.

 

# # #

 

We are grateful to our shareholders, bondholders, employees and other
stakeholders for their continuing support.

 

 

For further information, please contact:

 

 Burford Capital Limited
 For investor and analyst inquiries:
 Americas: Josh Wood, Head of Investor Relations - email                       +1 212 516 5824
 (mailto:jwood@burfordcapital.com)
 EMEA & Asia: Rob Bailhache, Head of EMEA & Asia Investor Relations -          +44 (0)20 3530 2023
 email (mailto:rbailhache@burfordcapital.com)
 For press inquiries:
 David Helfenbein, Senior Vice President, Communications - email               +1 646 504 7074
 (mailto:media@burfordcapital.com)

 Deutsche Numis - NOMAD and Joint Broker                                       +44 (0)20 7545 8000
 Duncan Monteith
 Charlie Farquhar

 BofA Securities - Joint Broker                                                +44 (0)20 7628 1000
 Peter Luck
 David Lloyd

 Jefferies International Limited - Joint Broker                                +44 (0)20 7029 8000
 Graham Davidson
 James Umbers

 Berenberg - Joint Broker                                                      +44 (0)20 3207 7800
 Toby Flaux
 James Thompson

About Burford Capital

 

Burford Capital is the leading global finance and asset management firm
focused on law. Its businesses include litigation finance
(https://www.burfordcapital.com/) and risk management, asset recovery and a
wide range of legal finance and advisory activities. Burford is publicly
traded on the New York Stock Exchange (NYSE: BUR) and the London Stock
Exchange (LSE: BUR) and works with companies and law firms around the world
from its global network of offices.

 

For more information, please visit www.burfordcapital.com
(http://www.burfordcapital.com) .

 

 

This press release does not constitute an offer to sell or the solicitation of
an offer to buy any ordinary shares or other securities of Burford.

 

This press release does not constitute an offer of any Burford private fund.
Burford Capital Investment Management LLC, which acts as the fund manager of
all Burford private funds, is registered as an investment adviser with the
US Securities and Exchange Commission. The information provided in this press
release is for informational purposes only. Past performance is not indicative
of future results. The information contained in this press release is not, and
should not be construed as, an offer to sell or the solicitation of an offer
to buy any securities (including interests or shares in any of Burford private
funds). Any such offer or solicitation may be made only by means of a final
confidential private placement memorandum and other offering documents.

 

Forward-looking statements

 

This press release contains "forward-looking statements" within the meaning of
Section 27A of the US Securities Act of 1933, as amended, and Section 21E of
the US Securities Exchange Act of 1934, as amended, that are intended to be
covered by the safe harbor provided for under these sections. In some cases,
words such as "aim", "anticipate", "believe", "continue", "could", "estimate",
"expect", "forecast", "guidance", "intend", "may", "plan", "potential",
"predict", "projected", "should" or "will", or the negative of such terms or
other comparable terminology, are intended to identify forward-looking
statements. Although Burford believes that the assumptions, expectations,
projections, intentions and beliefs about future results and events reflected
in forward-looking statements have a reasonable basis and are expressed in
good faith, forward-looking statements involve known and unknown risks,
uncertainties and other factors, which could cause Burford's actual results
and events to differ materially from (and be more negative than) future
results and events expressed, projected or implied by these forward-looking
statements. Factors that might cause future results and events to differ
include, among others, (i) uncertainty relating to adverse litigation outcomes
and the timing of resolution of litigation matters and (ii) those discussed in
the "Risk Factors" section of Burford's Annual Report on Form 10-K for the
year ended December 31, 2025 filed with the US Securities and Exchange
Commission on February 26, 2026. These factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements contained in the periodic and current reports that Burford files
with or furnishes to the US Securities and Exchange Commission. Many of these
factors are beyond Burford's ability to control or predict, and new factors
emerge from time to time. Furthermore, Burford cannot assess the impact of
each such factor on its business or the extent to which any factor or
combination of factors may cause actual results and events to be materially
different from those contained in any forward-looking statement. Given these
uncertainties, readers are cautioned not to place undue reliance on Burford's
forward-looking statements.

 

All subsequent written and oral forward-looking statements attributable to
Burford or to persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. The forward-looking statements speak
only as of the date of this press release and, except as required by
applicable law, Burford undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

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