Mexican non-bank lender Credito Real was downgraded to D from RD by Fitch. The rating agency then withdrew the rating citing the default of the entity. Fitch notes that some form of liquidation process is ongoing, based on the company’s announcements – On 14 July 2022, Credito Real said that a liquidation was ordered based on a commercial court judgement and its dissolution was recognized. The distressed company had defaulted on the principal payment of its CHF 170mn ($180mn) 2.875% bond due February 9, 2022 and was subsequently downgraded by Fitch to RD. In an exchange filing in June, Credito Real said, “A Chapter 11 filing is among the restructuring options that the company is considering as it seeks to preserve value for its stakeholders”. The company had total debt at MXN 53.3bn ($2.72bn) of which $1.9bn was in the form of global bonds as of 4Q 2021.
Credito Real’s dollar bonds are trading at highly distressed levels of 1-2 cents on a dollar.