CapCana to Miss Interest Payment

CapCana announced it will not pay a $4.8m interest payment originally due last month, once again pushing the troubled Dominican resort into default. The interest was due Oct. 31 for the 10% 2016 senior secured notes, a portion of the debt which CapCana issued as an exchange for 2013 bonds in 2009, after it fell in technical default for failing to keep enough cash in its debt service account. CapCana observers point out that the instruments are not actively traded, as many investors expected the company to once again fall on hard times. CapCana said in a statement that based on its projected cash flows, it will cease to make interest payments for the foreseeable future. The failure to pay interest due triggers cross-default provisions which would also make due the company’s 10% 2016 recovery notes. At the end of October, the company owed $96.03m in 2016 senior notes and an additional $119.08m in 2016 recovery notes.