A recently closed restructuring of Imexsa's structured export notes appears to have pleased both investors and the steel producer, even with the new paper located several notches into junk territory. In September the Mexican corporate closed an exchange handled by Dresdner Kleinwort Wasserstein of US$62 million of 10.125% 2003s for 10.625% 2005s. Standard & Poor's and Moody's Investors Service passed their verdicts on the new notes last week and gave them B-' and Caa1', respectively, mirroring the corporate ratings.

It appears bondholders won't blanch at the unappetizing rating. At S&P, Imexsa has been at B-' since June. The initial structure had never proved truly remote from the company's risk, sources said. "[Imexsa] clearly needed some room because of a serious liquidity problem," said one investor. Steel slumped to record lows of US$180 to US$190 per ton by the end of last year, while steep energy prices devoured the bottom line from the other end.

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