IUSA Completes $327.5 Million Debt Exchange Offer, Avoiding a Potential Concurso Mercantil Proceeding in Mexico

October 31, 2016

New York – Paul Hastings, a leading global law firm, announced today that the firm represented Industrias Unidas, S.A. de C.V. (“IUSA”), a Mexican diversified industrial company, in connection with a $327.5 million exchange offer that was used to refinance IUSA’s existing senior notes.

Pursuant to the exchange offer, in which 94% in principal amount of the existing notes were tendered for exchange, IUSA issued $327.5 million principal amount of Series A and Series B 9.00% Senior Secured Notes due 2023 in exchange for $319.7 million principal amount of its outstanding Series A and Series B 11.50% Senior Secured Notes due 2016.  The principal amount of the new notes included a payment-in-kind component, whereby the amount of interest accrued on the existing notes during the last interest period through the settlement date was included as principal in lieu of the cash payment of such accrued interest.  In addition, on the settlement date, IUSA paid approximately $21.1 million in cash to fully redeem the existing notes of holders that did not participate in the exchange offer.

IUSA pursued the exchange offer because it did not believe that it had the means to repay the amounts that were to become due and payable under the existing notes at their maturity on November 15, 2016.  The transaction represents a rare instance, in which a capital markets alternative was successfully used to refinance a Mexican company’s debt to avoid the protracted and costly alternative of a Mexican concurso mercantil proceeding.

Latin America practice partners Joy Gallup and Michael Fitzgerald led the team, which also included of counsel Pedro Reyes, associate Elena Jacque and foreign associate Rodrigo Guaida.

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