Bonds for Mexico’s Denim Maker Kaltex Proving Unfashionable
- Mexico’s Grupo Kaltex bonds cratered after refinancing flops
- Fitch expects distressed debt exchange, 31%-50% recovery value
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Caught between a drought in Texas and a war in Ukraine, one of Mexico’s largest denim and textile producers is up against the clock to avoid a default.
Bonds from Mexico’s Grupo Kaltex, which supplies denim and other fabrics to clothing names such as Levi Strauss & Co. and Vera Wang, have cratered nearly 40 cents since mid-February as the company failed for the second time to refinance its $218 million in notes due April 11. A week ahead of the maturity, the notes are valued at 60.5 cents on the dollar -- suggesting some investors are starting to see default as an increasingly likely prospect.