Desmet Rolls up Sleeves for Workout

Desarrolladora Metropolitana (Desmet) has hired Heritage Capital to advise on a restructuring of a $200m issue of 2017 10.875% bonds. The Mexican homebuilder missed its May coupon payment on the non-call 5 notes, issued in 2007 via Dresdner and was downgraded to Ca by Moody’s. The deal was recently quoted at 2 cents on the dollar by Credit Suisse. Heritage executives, some of whom worked at Dresdner at the time of the issuance, are familiar with the company, and are heard to have replaced Goldman Sachs as financial adviser on the restructuring, which is still in early stages. Bondholders are also heard to be forming an ad hoc committee to discuss a solution as a unit. Desmet has developed a reputation for lack of transparency with the markets, and strategists say the company has not provided updated financials in more than a year. Desmet is heard to have engaged Dewey & LeBoeuf and Guerra y Gonzalez for legal advice.