{"id":15009,"date":"2015-12-03T06:56:45","date_gmt":"2015-12-03T11:56:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=15009"},"modified":"2015-12-03T06:56:45","modified_gmt":"2015-12-03T11:56:45","slug":"mexico-faces-its-biggest-corporate-default-in-two-decades-as-construction-giant-misses-bond-payment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=15009","title":{"rendered":"Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment"},"content":{"rendered":"

Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment<\/a><\/h3>\n

Back in August, we said that “Something Is Very Wrong At Mexico’s Largest Construction Company…<\/a>“<\/p>\n

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“Let\u2019s say, for argument\u2019s sake, that you\u2019re a big company in an emerging market and suddenly, a commodities crash for the ages and a “surprise” devaluation by the world\u2019s engine for global growth and trade sends your country\u2019s currency into a veritable tailspin,” we wrote. “If that were the case, just about the worst possible situation you could find yourself in would go something like this (adapted\u00a0from Bloomberg<\/a>): “Eighty-five percent of [your] backlog is denominated in the [home currency], which plunged to a record low this week [and] almost half of [your] debt is in foreign currencies, mostly dollars<\/strong>.”<\/p>\n

That was the situation facing\u00a0Empresas ICA SAB which had just spooked bond investors by selling a key 3% stake in an airport operator for $56 million in order to pay down debt.<\/p>\n

Well, after turning in its worst quarter in nearly a decade and a half in October,\u00a0Empresas ICA SAB missed an interest payment this week in what\u00a0Bloomberg says<\/a>\u00a0is “just a prelude to what\u2019s likely to be the biggest default in Mexico in at least two decades.” Some $31 million in debt service payments came due on Monday and the company elected to utilize a 30-day grace period to try and make the payment.<\/p>\n

“Under the terms of the indenture governing the 2024 Notes,\u00a0the use of the 30-day grace period does not result in an event of default,<\/strong>” the company said, cheerfully.<\/p>\n

Carlos Legaspy, a money manager who holds ICA bonds due in 2017, 2021 and 2024, wasn’t as optimistic:\u00a0“Do I think they\u2019re going to pay within 30 days? No.<\/strong>\u00a0The 30 days are not going to make any difference.” Here’s a look at the 2024s:<\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment Back in August, we said that “Something Is Very Wrong At Mexico’s Largest Construction Company…“ “Let\u2019s say, for argument\u2019s sake, that you\u2019re a big company in an emerging market and suddenly, a commodities crash for the ages and a “surprise” […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,10910,3325,517,7530,670,4318],"class_list":["post-15009","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-corporate-default","tag-creditors","tag-mexico","tag-ratings","tag-recovery","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15009","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15009"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15009\/revisions"}],"predecessor-version":[{"id":15010,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/15009\/revisions\/15010"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15009"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15009"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15009"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}