Cap Cana Seeks Creditor Settlement

Cap Cana appears to be seeking to avoid default on a loan that came due yesterday, though on what terms was unclear as of late Wednesday. No default notices were reported issued in regards to the Dominican borrower’s $100m bridge loan via Deutsche and Morgan Stanley. The facility matured yesterday and people with knowledge of the process say they believe creditors and the company’s advisor, New York-based Weston Group, are in discussions to work out a solution that involves a discount on the facility. The company said in a statement issued late Monday it had offered its creditors – understood to include 5 hedge funds and one larger institutional investor – alternatives to paying down the full amount, but that the offers were rejected. People away from the process say the initial offer involved a substantial haircut to initial value. Hedge funds and buysiders in general are less willing to enter talks that would suggest a loss of principal, since the industry is seeing substantial redemptions and portfolio losses, according to people away from the process. Cap Cana’s CFO Alex Hazoury was not available for comment.