Mexico Regulator Fines CCM

Mexico’s market regulator has fined Comercial Mexicana (CCM) $3.8m for not fully revealing hefty derivatives trades that led it to default, though it saw no sign of wrongdoing on behalf of the company. “CCM maintains a dialogue with everyone involved in the restructuring process, which continues to advance favorably,” says the issuer. Comerci says it paid only MXP39.2m of the original MXP49.0m fine after receiving a discount for quick payment. “We view this development as another step forward in the restructuring process,” says Barclays, which notes that the company or its management team or shareholders could have been found liable. It adds that at current bond prices of 54-55, Barclays believes downside is limited and that a better deal is necessary for unsecured creditors to come into the fold. “Bondholders could see more than 10 points of upside potential at current levels,” says the bank. The Mexican retailer launched a MXP1.5bn exchange offer to local bondholders, as part of its restructuring deal. CCM is offering new 7-year floating-rate notes over TIIE, on a 1-for-1 basis, in exchange for 5 outstanding series of domestic bonds sold in 2008. Comerci aims to restructure $1bn-$2bn in liabilities after racking up more than $1bn in derivatives losses last year.