Mexico’s CCM Talks to Creditors

Mexican retailer Controladora Comercial Mexicana (CCM) is in talks with creditors after FX volatility significantly raised the value of its foreign currency debt. The MXP flared to a new low around MXP12.30/USD Tuesday. In a filing with the Bolsa, CCM says it is negotiating with creditors on how to meet its liabilities. It does not specify the amounts or currencies involved. CCM has a $200m 6.625% of 2015 that was trading just below par last week. It is rated BBB–/Baa2. The news follows the previous session’s announcement that Corporacion Durango had filed for bankruptcy protection in Mexico after missing a coupon payment on 10.5% coupon senior notes due 2017. The company filed for protection in Mexico, with an auxiliary process in the US, and plans to restructure $1.52bn in debt, including $509m in public obligations and around $1bn in liabilities at subsidiaries. As the first big LatAm corporate default in several years, Durango could mark the start of a new cycle of troubled firms throwing in the towel, as external markets continue to deteriorate. Others on the distressed funds watch list include Argentina’s Mastellone Hermanos, Impsa and Autopistas del Sol; Brazil’s Gol and Bertin; Colombia’s Transtel and Mexico’s Desmet, Industrias Unidas, Iusacell and Satmex. Desmet, which was recently trading in the mid-20s, has a November payment that looks unlikely to be met.