Credito Real’s Foreign Bondholders Weighing Legal Action in Mexico

International bondholders are considering taking legal action in Mexico to recoup losses from troubled non-bank lender Credito Real, four sources have told Reuters, after bank creditors secured a settlement earlier this month, Reuters reported. Credito Real bonds have lost about 99% of their value since the company defaulted on a 170 million Swiss franc ($175.98 million) bond in February, kicking off a commercial liquidation process criticized by shareholders for lacking transparency. Bondholders collectively owed around $2 billion are now in early talks about joining legal proceedings led by local minority shareholders, said Mexico-based lawyer Teodoro von Harrsch, who represents the equity holders’ group. “We are talking with bondholders to see if there’s a (legal) way we can help, we are looking for common ground,” von Harrsch said. Communications seen by Reuters show that multiple private international bondholders said they hoped to sign onto a Mexican lawsuit, and they joined a Zoom call with von Harrsch on the matter last week. Read more.