A structured transaction from Mexican-based steel company Ispat Mexicana SA de CV (Imexa), a subsidiary of Ispat International NV (Ispat), is on the brink of default. The future-flow transaction, Imexa Export Trust 1996-1, was originally scheduled to mature at the end of this year. However, the company is now seeking an exchange offering which will extend the life of the deal until 2008.

Moody's Investors Service originally rated the deal Ba2' and Standard and Poor's assigned a BB' rating. The deal has now fallen to a CC' rating from S&P and Ca' from Moody's. The decision on the exchange must be approved by the end of this month, and according to S&P, if the exchange offering occurs, the deal will be in default since the original terms of the transaction will not have been respected, sources say.

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