Latin Finance Restructuring of the Year Award 2013
New York, NY - ACGM, INC. (“ACGM”) is delighted to announce that Latin Finance has awarded the first of its kind, multi-million dollar, Trump Ocean Club restructuring runner-up position in Latin Finance’s much coveted annual Restructuring of the Year Award, part of the publications Deal of the Year award series. AGCM played a vital role in this groundbreaking deal, forming part of the team that led the successful restructuring, acting as Plan Solicitation Agent for the Trump Ocean Club’s developers, Newland International Properties, Corp. (“Newland”). The $220 million Trump Ocean Club restructuring narrowly missed out on the top award which was won by Belize’s $547.5m exchange offer.
The historic Trump Ocean Club restructuring marks several major firsts for the region. The deal is the first ever pre-packaged chapter 11 debt restructuring in Latin America and is the first U.S. chapter 11 reorganization by a Central American issuer. The deal also represents the first ever cross-border bond restructuring for a Panamanian corporate issuer and first ever restructuring of a local mortgage-backed, cross-border bond in Panama. The restructuring process was initiated after Newland missed a coupon payment in 2011.
ACGM’s Investment Banking & Advisory group worked tirelessly to ensure that creditors understood the complex pre-packaged plan of reorganization (the “Plan”), and to ensure that they exercised their vote, educating them on the benefits of voting in favor of the Plan and guiding them through the ballot process.
Following the voting deadline of April 29, 2013, Newland received a super-majority of all eligible votes in favor of the Plan from the holders of its $220 million 9.5% Senior Secured Notes due 2014 (the “Notes”), resulting in an accepting class as required for confirmation of the Plan under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). On April 30, 2013 Newland filed the Plan with the United States Bankruptcy Court in the Southern District of New York (the “Bankruptcy Court”) under the Bankruptcy Code. The plan was approved approximately one month later and became effective on July 3, 2013. Under the Plan, holders of Notes received new senior secured notes due July 2017 and Newland’s shareholders retained 100% of the equity in Newland.
A Chapter 11 reorganization is a judicial process governed under the Bankruptcy Code which provides businesses with debt relief to support a corporate rehabilitation without having to liquidate assets and cease operations. There is no equivalent process in Panama and the introduction of the Chapter 11 innovation to a Panamanian restructuring delivered valuable relief to Newland. Newland intends to continue normal operations during its Chapter 11 reorganization, while restructuring the Notes on more favorable terms. The Plan, including the restructuring of the Notes, is expected to have a positive impact upon Newland’s operations.
Carlos Abadi, CEO and President of ACGM, said that he was very pleased with Latin Finance’s recognition of the pioneering restructuring.
“This exciting restructuring and the accolade received from Latin Finance highlight ACGM’s pioneering spirit. These unique, first to market deals benefit from ACGM senior team of experienced industry professionals. As a dynamic, independent, boutique investment banking firm, we feel that ACGM is best positioned to bring to market first of their kind transactions. ACGM is currently working on a number of exciting transactions and we expect to bring a number of historic deals to market in the coming months of 2014.”
Some of the significant features of the Trump Ocean Club restructuring are listed below:
- First ever pre-packaged chapter 11 debt restructuring for South America/Central America;
- First ever U.S. chapter 11 reorganization for a Central American issuer;
- First ever cross-border bond restructuring for a Panamanian corporate issuer;
- First ever restructuring of a local mortgage-backed, cross-border bond in Panama;
- Hostile post-crisis distressed investors – Newland’s creditor composition was skewed by an influx of deep-discount buyers entering the market during the 2009-2010 post-crisis period;
- International real estate collapse – the 2008-2012 financial and economic crisis led to a collapse in the international real estate investment market. As mortgage financing stalled, sales of Trump Ocean Club’s real estate products, to its largely international purchaser base, weakened;
- Highly visible, Trump-branded property;
- Test of U.S. structured finance technique in cross-border transactions;
- Geographic reach – given Newland’s high yielding bond issue and the global markets reach of its iconic tower, Newland’s bondholders are geographically diverse, primarily led by Latin American, Caribbean, and U.S. based funds;
- Under the terms of the restructuring Newland shareholders retained 100% of their equity.
Completed in 2011, the iconic Trump Ocean Club is a 70-story luxury hotel and condominium complex that includes five swimming pools and a spa. Known for its distinctive architecture, the development is located in Panama City, capital of one the fastest growing economies in Latin America.
About Abadi & Co.
Founded in 1991, Abadi & Co. is an investment banking boutique which specializes in three core areas: emerging markets, financial institutions and restructuring & special situations. By focusing on these three areas of expertise, Abadi & Co. has built a team of independent specialists–Fluent in Finance®–who serve as powerful advocates for clients, focused on protecting their financial interests and delivering practical, high-value financial solutions. The Abadi & Co. team prides itself on its ability to guide clients through difficult and groundbreaking transactions, even in situations where the structuring complexities and challenges would have thwarted others.
Abadi & Co.’s experienced team works on a range of transactions, including mergers & acquisitions, debt & equity capital markets issues and recapitalizations. It caters to a global client base which includes companies, governments and financial institutions, across North America, Latin America, Europe and the Middle East. The firm’s specialization approach means that it only takes on engagements if they fall within one or more of its core areas of expertise, allowing it to assign a strong team to every engagement, providing clients with the attention and intellectual capital they deserve. The firm’s clients appreciate having direct access to a senior banker 24/7; they value the discretion of Abadi & Co.'s smaller team and are relieved of the conflict of interest concerns inherent in working with larger investment banks, which often look to cross-sell other products and services. In order to prevent conflicts of interest, and to ensure the independence of the firm's advice, Abadi & Co. does not conduct trading or manage investments.
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