Credito Real tenders for up to $250 million 7Ό% senior notes due 2023

By Cady Vishniac

Detroit, Jan. 6 – Credito Real, SAB de CV has launched a capped cash tender offer for up to $250 million of its outstanding $426,903,000 of 7Ό% senior notes due 2023 (ISINs: US22548WAA09 and USP32457AA44), according to a press release.

The purchase price will be $1,008.75 per $1,000 face amount of notes. Holders who tender their notes before the early deadline of 5 p.m. ET on Jan. 20 will also receive an additional $30 per $1,000 face amount.

The company has also begun simultaneous consent solicitations to amend the indenture of the notes.

Tenders and consents may be withdrawn prior to the early deadline.

The tender offer and consent solicitation will expire at 11:59 p.m. ET on Feb. 3.

All holders who tender their notes will be considered to have delivered their consents to the amendments. The $1,008.75 price of the notes includes a $2.50 consent payment from Credito Real. A holder may deliver their consent without tendering notes but may not tender notes without delivering their consent to Credito Real.

Early settlement is expected on Jan. 22 and final settlement on Feb. 4.

The proposed amendments for which Credito Real is seeking consents would:

• Permit the company to incur debt, including senior debt, to refinance capital securities under certain conditions;

• Increase the maximum permitted indebtedness under the company's general basket to the greater of $100 million and 15% of the consolidated net worth of the company and its subsidiaries from the greater of $60 million and 15% of the consolidated net worth of the company and its subsidiaries;

• Amend the limitation on the on guarantees covenant to the effect that only eligible subsidiaries that guarantee the company’s debt are required to become guarantors under the indenture and remove references to the limitation on creation of liens, which is already included elsewhere in the indenture;

• Permit prepayment, exchange, refinancing, replacement, purchase, redemption, retirement, defeasance, refund or other acquisition for value of subordinated indebtedness so long as the payment satisfies certain conditions;

• Increase the cross-default threshold to $25 million from $20 million;

• Increase the minimum threshold for an asset sale to be subject to the restrictions under the indenture to $20 million from $10 million;

• Reset the basket to make investments in permitted businesses yearly, with any unused amounts in any carried over into succeeding calendar years;

• Add to, amend, supplement or change certain other defined terms related to the preceding changes;

• Reduce the minimum notice periods for an optional redemption of notes; and

• Include certain conforming changes to the indenture and the certificates of the notes (or replace the certificates) to achieve all these measures.

BNP Paribas Securities Corp. (888 210-4358, 212 841-3059), Goldman Sachs & Co. LLC (212 357-1452, 212 902-6351, GS-LM-NYC@gs.com), Santander Investment Securities Inc. (855 404-3636, 212 940-1442) and SMBC Nikko Securities America, Inc. (888 284-9760, 212 224-5328) are the dealer managers and solicitation agents for the tender offer. D.F. King & Co. (877 732-3621, 212 269-5550, creal@dfking.com) is the information agent and the tabulation agent for the consent solicitations.

Credito Real provides consumer financing. It is based in Mexico City.

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