Cap Cana Wraps up Exchange

Cap Cana has concluded a hard fought exchange offer with a 95.46% participation rate. The company, which sought to exchange $250m in 9.625% of 2013 bonds issued in 2006 for two new classes of notes, concluded the deal just in time to avoid a May 3 coupon payment, which would have dragged the resort into default. In exchange for the old notes, investors received $129.3m in 10% senior secured 2016 notes, and $125.9m in 10% 2016 recovery notes with PIK features. Coupon payments start in October on senior notes, and the others only pay cash if there are sufficient funds. The new bonds are the result of several tough negotiations between the company and its bondholders, who proposed dozens of changes Cap Cana’s original proposal surrounding structure, collateral and security package, and managed to have those largely implemented. New York-based Weston International was hired by Cap Cana as an advisor, and mediated the process. The shop also acquired on behalf of the company $63m in outstanding 2013 bonds in the secondary.