Independencia Updates Workout Plan

Brazilian meatpacker Independencia has filed a new proposal for its debt restructuring, following weeks of back and forth with its various classes of creditors. The new document, made available Friday, is the latest in a series of proposals that began in July. For holders of dollar denominated bonds, of which there is $525m outstanding in 9.875% in 2015s and 2017s, the latest proposal involves a 50% NPV loss and an exchange for a new 2016 12.000% PIK note. Independencia would be required to pay at least 1% of the interest due on the notes in years 1 and 2, and have the option to capitalize the remainder of what it owes in interest through year 3. In year 4, its minimum interest payment requirement rises to 4%, and all accrued interest must be paid in full in year 7. For holders of BRL-denominated debt, of which the exact amount is not spelled out in the proposal, the same terms apply, including haircut and final maturity, but the interest rate on the new notes is 14.000%. An earlier proposal made in July suggested converting 75% of outstanding debt into 8% coupon perpetual notes that would only pay principal in the event of a change in control. Independencia is also expected to raise a DIP facility worth BRL330m, part of whose proceeds would go towards repaying supplier debt. Arsenal Consultoria is advising Independencia.