Mexico’s Credito Real accepts $177.49 million tenders on 2023 notes

By Taylor Fox

New York, Feb. 4 – Credito Real, SAB de CV announced the final results of its offer to purchase up to $215 million of its outstanding $426,903,000 of 7¼% senior notes due 2023 (ISINs: US22548WAA09, USP32457AA44), according to a news release.

As of the 11:59 p.m. ET Feb. 3 expiration time, $177.49 million, or 82.6% of the maximum tender amount and 41.6% of the total amount outstanding, were validly tendered.

As previously reported, $177.09 million of the notes, or 82.4% of the maximum tender amount and 41.5% of the total amount outstanding, were tendered as of the 5 p.m. ET Jan. 22 early tender time.

The company also received consents on its proposed amendments representing $218,804,000, or 51.25%, of the outstanding principal amount as of its early consent solicitation and cash tender deadline of 5 p.m. ET on Jan. 21.

As of the initial early tender deadline, the company 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.

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 $30.00 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 expired at 11:59 p.m. ET on Feb. 3. Early settlement was 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.

Details

The early settlement date occurred on Jan. 22.

The final settlement date is expected for Feb. 4.

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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