Salinas Pliego is in conflict with Total Play's international creditors with this agreement | Mexico News | News from Mexico

Mexico City.- Foreign investors and creditors Total Play, a Mexican internet service provider, was hit last week after its owner, Ricardo Salinas Plego, reached an agreement with local owners, leaving them at a disadvantage if the company goes bankrupt, Bloomberg reported.

As mentioned, The company has reached a special agreement with a group of Mexican investorsled by Grupo ICEL, a higher education operator in Mexico, to replace its bonds with new secured bonds due in 2028. This action surprised holders of Total Play's international bonds due next year.

Why did Salinas Plejo seek an agreement with Mexican investors?

Total Play Rewards They were already among the worst performers in the markets Emerging markets this year, the announcement of the swap caused its value to decline further, reaching a minimum of 50 cents per dollar. The company later pledged to offer a similar deal to global bondholders, with covered bonds offering higher coupons, helping to offset some of the losses, with prices stabilizing around 54 cents on Tuesday.

Balanz analyst in Buenos Aires, Juan DevilicianHe pointed out that this agreement Highlights the company's preference for local investors Lack of transparency with international holders.

This indicates the company's preference for non-traditional local investors and its lack of transparency with international shareholders, Juan Develikian, an analyst at Balanz in Buenos Aires, notes in a note.

Who are Total Play's major creditors?

Non-banking lender ICEL Group had become Critical credit to Total PlayIt now represents 43% of total debt, compared to 25% previously. Moreover, debts are now secured It represents 66% of the company's debtcompared to 56% recorded at the end of the third quarter, according to Eduardo Nieto, a credit analyst at the bank. C. B. Morgan Chase.

Although the rest is possible Bonds are exchanged on favorable termsNieto warns of the necessary caution, Considering that the high cost of debt could lead to cuts and worse terms for future agreements with a broader base of bondholders.

While there is potential for the remaining 25 to be redeemed on favorable terms, we remain cautious as we believe a higher cost of debt could lead to a write-down of the debt and worse future deal conditions with the broader base of bondholders.

So far, actors Salinas, Total Play, and ICL Group It did not respond to requests for comment made by Reforma.

This agreement raised concern among Total Play's international creditorsWho face an uncertain situation due to the preference shown by the company towards local investors and the ambiguity in its financial actions.