Independencia Misses Coupon Payment

Independencia will not make an upcoming interest payment on its 15% of 2015 bonds, the meatpacker says. The Brazilian company that emerged from bankruptcy protection proceedings in March cites “ongoing financial challenges” and notes it is in discussions with creditors to restructure debt. “The company has continued to struggle with its working capital requirements and has been unable to resume its operations at the level that will be sufficient to meet its projected obligations,” it says. Independencia has been looking to raise new equity capital as part of a liability management transaction in which its unsecured debt is converted into equity, and new investors brought in. “The default is not entirely unexpected by the market, considering how the bonds were trading,” says Barclays. It adds that holders of the 2015 now need to weigh whether to accelerate to try and liquidate the collateral, or wait for a proposal from the company. “Creditors are more likely to wait for a proposal before reacting. Until that happens, there is really little incentive to get involved in the capital structure,” adds Barclays.