NEW YORK, Nov 30 (IFR) - Mexican infrastructure firm Empresas ICA is entering a 30-day grace period after failing to pay a US$31m coupon due on Sunday on its outstanding 8.875% 2024s.
“Under the terms of the indenture governing the 2024 Notes, the use of the 30-day grace period does not result in an event of default,” the company said in a statement on Monday.
The bonds were already trading at distressed levels of around 25.5 on Monday after ICA said in late October that it had hired Rothschild Mexico as a financial advisor to improve liquidity and reduce leverage.
At the time, it said it had no plans to suspend payments or declare bankruptcy.
In early November, Moody’s downgraded the credit to B3 from B2, with a negative outlook, citing high leverage, modest interest coverage and tight liquidity.
“As of September 30 2015, ICA’s fully consolidated gross leverage (including non-recourse debt and Moody’s standard adjustments) of 9.0 times is high for the B rating category,” the agency said at the time.
With around 53% of its debt denominated in US dollars, the company has been hit by the dramatic decline in the value of the peso this year, Moody’s said.
Year-to-date the pesos has dropped about 11% against the dollar. (Reporting By Paul Kilby; editing by Shankar Ramakrishnan)