Mexico’s IUSA starts exchange in hope of avoiding concurso mercantil

New York, Sept. 13 – Industrias Unidas, SA de CV announced it is offering series A and series B 9% senior secured notes due 2023 in exchange for its outstanding series A and series B 11˝% senior secured notes due 2016.

The company said it is carrying out the transaction in order to refinance the existing notes.

IUSA is not able to pay principal and interest on the notes and believes it is not likely to find new financing, according to a news release.

By making the exchange offer it hopes to avoid a concurso mercantil proceeding.

The exchange will also avoid “contentious litigation” which could disrupt business and damage the value of the company.

For each $1.00 principal amount of existing notes, IUSA is offering $1.00 of new notes.

Holders who participate will also receive a PIK payment of new notes for the accrued interest on the existing notes from Aug. 15. No cash payments will be made for accrued interest.

The new notes will amortize in 12 semiannual installments starting one year after the initial interest payment, which will be six months after settlement of the exchange.

The new notes will have “substantially the same covenants” and other terms and conditions as the existing notes and will be secured by the same collateral once the existing notes are repaid.

Completion of the exchange is subject to at least 95% of the existing notes being tendered.

The exchange ends at midnight ET on Oct. 7. Settlement will follow as soon as possible afterwards.

Epiq Corporate Restructuring (646 282-2500, 866 734-9393 or tabulation@epiqsystems.com) is the information and exchange agent.

IUSA is a Mexico City-based manufacturer of copper-based and electrical products for the housing and electrical power markets.

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