Trump Panama Hotel Bondholders May Back $220 Million Swap

Creditors of the Trump Ocean Club in Panama are probably going to accept a restructuring deal for $220 million of bonds, said Ajata Mediratta, a partner at Greylock Capital Management.

Newland International Properties Corp, the Ocean Club developer, announced a proposal today with the negotiating committee after missing a $31.9 million amortization payment in November 2011, said Mediratta, who leads a committee representing more than 75 percent of defaulted bondholders. The Trump Ocean Club is developer Donald Trump’s first hotel and apartment complex to open outside the U.S.

“This is something that’s been heavily negotiated with the company,” Mediratta said in a telephone interview from New York today. “The exchange committee intends to accept it and I expect the majority of bondholders will as well.”

The agreement “may include the use of a pre-negotiated and pre-packaged Chapter 11 process under New York law” to expedite the restructuring, according to an e-mailed statement from Newland today.

Newland will offer a proposal to all bondholders over the next few weeks, John McCormack of Gapstone Group LLC, which is advising the developer, said today in a phone interview. He declined to disclose terms of the restructuring.

The price of the defaulted 2014 bonds rose 5.3 cents to 64.5 cents on the dollar yesterday, the last day for which pricing is available, according to data compiled by Bloomberg.

(Updates with Newland statement in fourth paragraph.)
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