Industrias Unidas, S.A. de C.V. ‘s $250.4 Million Exchange Offer

Paul Hastings represented Industrias Unidas, S.A. de C.V. (“IUSA”), a Mexican diversified industrial company, in connection with an approximately $250.4 million exchange offer that was used to refinance IUSA’s existing senior secured notes.

Pursuant to the exchange offer, in which 95.6% in principal amount of the existing notes were tendered for exchange, IUSA issued approximately $250.4 million aggregate principal amount of Series A and Series B 9.00% Senior Secured Variable Coupon Notes due 2027 (including accrued interest) in exchange for approximately $245.3 million aggregate principal amount of its outstanding Series A and Series B 9% Senior Secured Notes due 2023. The principal amount of the new notes included a payment-in-kind component, whereby PIK notes were issued for the amount of interest accrued on the existing notes. The new notes also contain a number of other unusual features including a unique variable interest component that will adjust based on the company’s results. In addition, on the settlement date, IUSA paid approximately $11.3 million in cash to fully redeem the existing notes of holders that did not participate in the exchange offer.

IUSA pursued the exchange offer in order to refinance the existing notes and avoid the disruption that would result from a Mexican bankruptcy filing. IUSA, a company with significant operations in the U.S., defaulted on its existing notes by failing to pay principal and interest on October 31, 2019. The transaction represents another successful instance in which a capital markets alternative was utilized to refinance a Mexican company’s debt to avoid the protracted and costly alternative of a Mexican concurso mercantil proceeding.

Latin America practice partners Michael Fitzgerald (Picture) and Joy Gallup led the team, which also included of counsel Pedro Reyes, associate Taylor Davis and foreign associates Miguel Desentis and Jose Pellon, as well as support from tax partner David Makso and tax associate Josh Milgrom.

Involved fees earner: Michael Fitzgerald – Paul Hastings; Joy Gallup – Paul Hastings; David Makso – Paul Hastings; Joshua Milgrom – Paul Hastings; Pedro Reyes – Paul Hastings;

Law Firms: Paul Hastings;

Clients: Industrias Unidas, S.A. de C.V.;


Author: Ambrogio Visconti