Credito Real gets consents, announces early results for 2023 notes

By Cady Vishniac

Detroit, Jan. 22 – Credito Real, SAB de CV has received tenders representing $177.09 million and consents representing $218,804,000, or 51.25%, of the outstanding principal amount of its $426,903,000 of 7¼% senior notes due 2023 (ISINs: US22548WAA09, USP32457AA44) as of its early consent solicitation and cash tender deadline of 5 p.m. ET on Jan. 21, according to a press release.

Having gotten the requisite consents, the company plans to put its proposed amendments to the indenture of the notes into effect on Friday.

The previous early tender and consent solicitation deadline of 5 p.m. ET on Jan. 20 was extended by a day to 5 p.m. ET on Jan. 21. As of the initial deadline, the company had received tenders and consents from holders of $211,869,000, or 49.6%, of the outstanding notes, and required additional consents from holders representing only $1,582,500, or 0.4% of the outstanding notes, in order for its proposed amendments to the notes’ indenture to pass.

The company launched the tender offer and consent solicitation to amend the indenture of the notes on Jan. 6, as previously reported.

The purchase price for the notes is $1,008.75 per $1,000 face amount. Holders who tendered their notes before the early deadline will also receive an additional $30 per $1,000 face amount.

The $1,008.75 price of the notes includes a $2.50 consent payment from Credito Real. All holders who tender their notes are considered to have delivered their consents to the company’s proposed amendments. Holders may also deliver their consents without tendering notes, and holders representing $41,714,000 of the notes did so before the early deadline.

The tender offer and consent solicitation will expire at 11:59 p.m. ET on Feb. 3. Early settlement is expected on Jan. 22 and final settlement on Feb. 4. The withdrawal deadline has passed.

Consents

The amendments for which Credito Real sought and obtained consents will:

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

• Increase the maximum permitted debt 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 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 debt 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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