Su Casita Readies Offer

Su Casita is preparing a MXP7.4bn exchange offer to bondholders, it says, to be launched “soon,” and give creditors about 70% recovery. The deal, which the company has been discussing since defaulting on MXP debt last year, involves outstanding USD bonds and long-term and short-term Mexican domestic debt. Su Casita will propose offering domestic debt holders up to MXP2.49bn in new 7-year local bonds paying TIIE plus 1.0% stepping up incrementally to TIIE plus 2.5% in year 4, and also up to 38.4% of its equity, estimated at MXP1.48bn. It is offering USD bond holders up to $60m in new 7.5% 7-year bonds and up to 11.6% of its equity, estimated at $447m. The offer is contingent upon an acceptance rate of at least 98% of bondholders, Su Casita says. If unsuccessful, the mortgage lender will enter bankruptcy processes. In order to conserve funds for the process, the company says it has stopped paying interest on USD debt. It does not give an exact timeframe for the offer. Rothschild is advising Su Casita.