Mexico

Some local lenders to Mexican homebuilder Geo voted against signing an agreement the company recently reached with its major bank lenders to restructure its debt, according to a statement on Monday with Mexico's stock exchange, Reuters reported. The lenders hold local debt certificates that are backed by Geo assets. Geo, which is struggling with a heavy debt load and slowing home sales, said in June its main bank creditors had also agreed not to bring any new legal proceedings against the company and to suspend existing lawsuits.

Home buyers and investors are turning their backs on Mexico's low-income housing darlings, bringing a government-fueled boom that lasted more than a decade to a screeching halt. Scores of new homes in far-flung communities sit empty, while banks have canceled credit lines to some of the country's biggest housing companies, The Wall Street Journal reported. Homebuilders Urbi Desarrollos Urbanos SAB and Corporación Geo SAB, after luring more than $1 billion in foreign capital via overseas bond sales, skipped debt payments in April while they attempt to stave off bankruptcy.

Creditors of struggling Mexican homebuilder Homex could seek accelerated payment of the company's debt after Homex missed payments on derivative positions, according to a filing on Wednesday, Reuters reported. Failure to meet payments due on derivatives "arguably" constitutes an event of default on debt owed by Mexico's second-largest homebuilder, the company said in its delayed annual filing with the U.S. Securities and Exchange Commission. The company at the end of December had a total of $900 million in three bonds due in 2015, 2019 and 2020, according to its fourth-quarter report.

Mexican home builders and their creditors have been hiring U.S. bankruptcy lawyers and other advisers, as the companies struggle with mounting debt obligations, The Wall Street Journal reported. Two of the country's leading builders—Urbi Desarrollos Urbanos SAB and Corporación Geo SAB—missed debt payments in April and have reported dismal earnings. Urbi is considering a bankruptcy filing in Mexico as one option, some people familiar with the matter said. The two builders have tapped a combination of U.S. financial advisers and law firms, according to people familiar with the hirings.

Mexico's government proposed a sweeping overhaul of the banking sector Wednesday to make credit cheaper and more available, a move desperately needed in a country where bank loans represent less than 20 percent of GDP - one-tenth the level seen in the United States, the Associated Press reported. The plan would encourage banks to compete and lend more, create incentives for mid-size companies to list shares on the stock market, and modify bankruptcy laws to make it easier for lenders to seize debtors' assets.

Corp. Geo SAB, Mexico’s second- largest publicly traded homebuilder, said it will seek to restructure debt after bleeding cash for a third straight year, sparking a selloff that sent its bonds to record lows, Bloomberg reported. Geo hired Fians Capital to provide advice with the “principal objective of generating efficiencies and reviewing alternatives for restructuring its debt,” according to a filing to the Mexican stock exchange.

Mexico's Vitro said on Monday it had ended a lengthy legal fight with creditors after a Mexican businessman bought a chunk of the glassmaker's debt held by funds that had led the court fight, Thomson Reuters News & Insight reported. Under the deal, Monterrey-based businessman David Martinez' Fintech fund will buy all the debt held by U.S. hedge funds that were fighting Vitro in court over payment, the company said in a statement.

Axtel SAB plunged the most in three weeks after a creditor group said it would reject the company’s restructuring offer. The stock of Mexico’s second-largest land-line phone carrier fell 3.9 percent to 3.19 pesos at 1:59 p.m. in Mexico City Friday. Bondholders controlling 40 percent of Axtel’s dollar notes will reject the Mexican phone company’s restructuring offer, Bloomberg News reported yesterday, citing a letter obtained from two investors in a creditor group.

Mexican glassmaker Vitro said on Monday it had begun a legal process to recover up to $1.59 billion in damages from hedge funds who sued the company in Mexico but lost on appeal, Reuters reported. Vitro went through a $3.4 billion bankruptcy reorganization in Mexico, but some creditors strenuously opposed that plan, and they have been fighting in U.S. courts. Vitro said in a statement that it could collect damages from a trust that has been holding new bonds and payments that correspond to investors who opposed the Mexican restructuring.

A U.S. judge ordered that 10 units of Mexican glassmaker Vitro SAB de CV be put into U.S. bankruptcy and he found that several of them had taken secret steps to prevent creditors from collecting money owed to them, Reuters reported. Several U.S. hedge funds led by Aurelius Capital Management and Elliott International hold defaulted notes issued by the subsidiaries and sought to put the units into bankruptcy.