Latin America's largest transport and logistics company, Grupo TMM, plans to redeem a 2007 secured bond with a $200 million asset-backed loan from Deutsche Bank, according to a company press release. "The assets backing the loans will be accounts receivables from clients," said a company source.
The secured bond were issued in 2004 for $508 million via Miller Buckfire, but has shrunk significantly through amortization, according to the source. The notes were used to retire two other bonds as part of a financial restructuring designed to heal the company's ailing financial condition. Those notes were a 10.25% 2006 totaling $197 million and a 9.5% 2003 for $171 million. The company defaulted on its debt in May 2003.
Now that TMM is in much better shape, the 2007 notes have become more of a burden because they tie down a large volume of its assets, the source said. The loan would help free some of them, he added.
TMM shareholders are scheduled to vote on the loan proposal at a meeting on Aug. 18.
In order to shave down its debt, the company has shed assets over the past couple of years, most strikingly a 25% stake in Mexico's largest railroad, which was sold to Kansas City for $400 million, according to newswire reports.
Headquartered in Mexico City, TMM provides both ocean and land transportation services. Aside from redeeming the 2007 notes, proceeds from the Deutsche loan are earmarked for capital projects.
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