by Aline Lima
An ad hoc group of holders of InterCement's (CCC-/CC) USD 551m 5.75% bonds due 2024 have selected Moelis & Company as financial advisor and Cleary Gottlieb and Padis Mattar Advogados as legal advisors, ahead of an expected bond refinancing, according to two sources close to the matter.
The bondholder group includes Ashmore, Moneda and Redwood, as reported. The Brazilian cement maker's six largest holders also include Cigna, Contrarian and BTG Pactual, a third source close said. The six hold almost 50% of total amount outstanding “and five of them were in talks with the advisor candidates", this source said.
The Brazilian cement maker hired Houlihan Lokey as financial advisor, and Munhoz Advogados and White & Case as legal advisors.
InterCement has initiated negotiations with creditors to request waivers on its 2Q23 debt payments, including a BRL 100m (USD 20m) loan from HSBC due on 25 May.
The cement maker has been also engaged in talks with Bradesco, Banco do Brasil and Itau, who are critical parties in the debt restructuring, as reported. A bond refinancing would involve collateral, and the banks not only have a pledge of the company’s total stake in its Argentine subsidiary, Loma Negra, but also the right to receive additional collateral if the value of their guarantee is less than the coverage ratio of 115%.
In the bond refinancing, InterCement also intends to offer an increased interest rate and no haircut, as reported. The collateral could be a Brazilian plant or Loma Negra. The bond refinancing would allow the cement maker to extend the amortization of BRL 866m in domestic bonds held by the banks to 2027, as they are redeemable in May 2024.
Officials at InterCement, Moelis, Cleary and Padis Mattar declined to comment on the matter or did not respond to a request for comment.
The 2024 bonds traded at 56 today, according to MarketAxess.
