Axtel Climbs as Creditors Accept Restructuring; Bonds Jump

Shares and bonds of Axtel SAB, Mexico’s second-largest landline telephone carrier, rallied after the company said a majority of creditors accepted its debt-restructuring offer last week.

Axtel shares jumped 7.5 percent to 3.59 pesos at 1:30 p.m. in Mexico City trading, after earlier today reaching 3.65 pesos, the highest intraday price since Oct. 25. Yields on Axtel dollar bonds maturing in 2017 declined 44 basis points, or 0.44 percentage point, to 19.94 percent, headed for the lowest closing level since Sept. 17.

The company’s bondholders accepted a combination of senior secured debt, peso-denominated convertible bonds and cash to replace securities due in 2017 and 2019, Axtel said in a statement after markets closed on Jan. 18. The company is in the process of selling tower assets to American Tower Corp. for $250 million in a transaction contingent upon the success of the debt exchange.

“This is very positive for Axtel, without a doubt,” Andres Medina-Mora, a Sao Paulo-based analyst with Corporativo GBM SAB, said in a telephone interview today. “This also makes the sale of the towers possible, and that’s significant.”

Axtel, based in San Pedro Garza Garcia, unveiled a new swap on Jan. 14 that improved the terms of its $765 million debt restructuring after 40 percent of creditors rejected the initial offer.

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