Weston Funding offers to purchase $20 million Cap Cana 9 5/8% notes

By Susanna Moon

Chicago, Jan. 12 - Weston Funding LLC said it began a cash offer to purchase up to $20 million principal amount of Cap Cana, SA's $250 million 9 5/8% senior secured notes due 2013.

The offer will expire at 1 p.m. ET on Jan. 23.

Weston will pay $350 per $1,000 principal amount of notes. The purchase offer is on a first-come, first-serve basis, according to a press release.

Weston said it may choose to purchase more than $20 million of notes.

On Dec. 29, Weston said it increased its offer to purchase up to $100 million of Cap Cana's 9 5/8% notes and will now pay $350 per $1,000 principal amount of notes.

The offer was raised from $334 per $1,000 principal amount. The company also will pay accrued interest up to but excluding the settlement date.

The offer was extended to 1 p.m. ET on Dec. 30 from Dec. 24.

As already noted, the deeply discounted offer comes ahead of an exchange offer being planned by Cap Cana that would give noteholders at least $1,000 of new notes for each note exchanged.

According to a prior news release, Weston has been informed by Cap Cana's management that the board of directors is evaluating structures for the exchange offer and that the offer would be executed in January.

Noteholders would be given an option to exchange their notes for two new series of notes with different characteristics. One of the series would be newly issued senior secured notes backed by a higher quality package of collateral partially substituting the existing collateral that currently secures the notes with coverage levels that would exceed the current levels.

The second series would be a separate series of liquidating trust certificates maturing in four to four-and-a-quarter years representing an undivided interest in some real estate assets owned by Cap Cana. The assets contributed to the liquidating trust would be managed and sold by a third party. The proceeds from sales of those assets would then be used primarily to pay down the outstanding principal amount of the liquidating trust certificates.

The exchange offer would be equally divided between the new notes and liquidating trust certificates. The new notes would be issued on a par-for-par basis, and the liquidating trust certificates would be issued on a ratio of 1.333 to 1.000 of principal amount of notes exchanged.

Consent solicitation

On Jan. 7, Cap Cana said it was launching a new consent solicitation for the 9 5/8% notes.

The company is seeking a waiver of the technical default that occurred when it failed to deposit funds for the May 3 interest payment on the notes in the debt service reserve account by Jan. 2.

Cap Cana is also seeking consent to extend the deadline for the deposit of the reserve requirement to Feb. 24. The company said this will give it enough time to complete the exchange offer it plans to launch for the notes before the end of January.

The exchange offer represents part of the company's restructuring and debt-reduction plan designed to improve its capital structure and financial position in response to the worldwide downturn in the credit and real estate markets, according to a previous release.

Cap Cana is holding ongoing discussions with noteholders about an "amicable and proactive" restructuring process.

The proposed waiver and amendment require consents from holders of a majority of the outstanding notes.

The consent solicitation will expire at 5 p.m. ET on Jan. 15.

Questions about the purchase offer can be directed to Weston International Capital Markets LLC at 212 888-4560.

Cap Cana is a Santo Domingo, Dominican Republic-based resort.

Weston Funding is a wholly owned subsidiary of Weston Group LLC, which is a New York-based investment banking firm. Cap Cana was advised by Weston Group when it extended its bridge loan in November and obtained a waiver of defaults.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.