Corp. Geo Bonds Rise to Two-Week High After Standstill Agreement
Bonds issued by Corp. Geo SAB (GEOB) climbed to a two-week high after the biggest Mexican homebuilder by number of homes sold said it reached a standstill agreement with its main bank creditors.
Bonds due in 2022 rose 0.07 cent on the dollar to 41.68 cents at 8:56 a.m. in New York, the highest level since May 21, according to data compiled by Bloomberg.
As part of the accord, creditors won’t take legal action against Geo and will suspend any claims already initiated, the company said in a regulatory filing yesterday after the market closed. The agreement is valid until Sept. 3.
Mexican homebuilders are struggling to pay their debt after a shift in government policy to promote more capital-intensive apartments in cities depleted cash. Geo defaulted on a 2.3 million peso ($178,000) bond payment due in April 26 after cash fell by 84 percent in the first quarter.
In a separate filing yesterday, Mexico City-based Geo said it hired Rothschild as an adviser to restructure its debt.
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