On Monday, Isolux Corsán said that it had entered into a restructuring agreement “with the overwhelming support of its financial creditors”.
As part of that agreement Grupo Isolux Corsán Finance, the company’s debt issuing vehicle, filed a suspension of payments proceeding on Thursday last week in the Amsterdam District Court on its €850m 6.625% 2021 bond. The Dutch Court in turn issued a preliminary suspension of payments order that imposes a moratorium and appoints an administrator to work with Isolux’s board.
Grupo Isolux Corsán, which is a guarantor of the unsecured notes, also filed a ‘petitions for homologación of a refinancing agreement’ in the Mercantile Court of Madrid, along with several of its Spanish subsidiaries that are obligors or guarantors of financial debt.
On Friday last week, Grupo Isolux Corsán Finance and the four Spanish companies that guarantee the unsecured notes filed cases under chapter 15 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York.
Five year credit default swaps referencing Grupo Isolux Corsán Finance are quoted at around 8,000bp, or 75 points up front. This implies a recovery on the company’s bonds of around 25 cents. The CDS sailed over 15,000bp in early May, but had come back to 5,000bp ahead of the restructuring plan.
The 6.25% bond is quoted around 19 points, having risen from 15 during July.
Grupo Isolux Corsán Finance was previously a constituent of the iTraxx Europe Crossover index, but was removed at the roll between the last series (24) and the on-the-run S25. Along with other wide-trading names such as Abengoa, Hema, Norske Skog and Public Power Corp, it contributed to dispersion at the wide end of the Crossover index last year, which increased investor interest to trade Crossover equity tranches.
