Lamosa Reprices Leveraged Facility

Mexican tilemaker Lamosa has wrapped up restructuring of a $900m loan facility after close to a year of back and forth with lenders. The Scotia-led loan from late 2007 that was restructured closed in December. It did not involve a change in final maturity or amortization schedule, though margins were bumped up significantly and a consent fee was paid to lenders. When closed in 2007 with a leverage ratio of 3.0x-3.5x, a $675m 6-year dual-currency tranche paid Libor plus 200bp. A $225m second-lien bullet loan held exclusively by Ontario Teachers’ Pension Plan (OTPP) is heard to have been paying up to 450bp at launch. As a real estate and generalized liquidity crisis hit the company, leverage was heard to have widened to 5.0x in Q1 2008 and above 6.0x soon after, causing a breach in leverage covenants, though debt service remained intact. Throughout nearly all of 2009, a discussion on what to do to compensate lenders took place and the final result was unveiled in late December. According to a banker on the deal, a leverage grid was set up whereby the company pays Libor plus 500bp above 6.0x – where it stands today – 450bp at 5.0x-6.0x; 400bp at 3.5x-5.0x; 350bp at 3.0x-3.5x and 300bp at 1.0x-3.0x. Lenders also received a consent fee of 200bp. “The result is good for everyone involved,” says a banker leading the financing. However the subordinated bullet piece held by OTPP does not benefit from adjustments made to the senior debt, says a banker on it. Another executive adds OTPP’s resistance to the workout is among the reasons for months of delay. OTPP did not respond to requests for comment. Other lenders that participated in the senior portion include BBVA, Banamex, Comerica, HSBC, JPMorgan, Unicredit, Banorte, ING, Merrill, Inbursa, ABN, Santander, and WestLB.