News Column

Fitch: Noteholders Direct Trustee to Accelerate Maquinaria Especializada's Notes

June 11, 2014



CHICAGO--(BUSINESS WIRE)-- Fitch has been notified by The Bank of New York Mellon, as Indenture Trustee, of a declaration of acceleration of the principal balance of the $160 million senior secured notes issued by Maquinaria Especializada MXO Trust Agreement No. F/00762, following written direction from the noteholders representing a majority of the aggregate principal amount (the controlling party).

The controlling party has the right to liquidate the existing reserve balance of approximately $10.8 million, and repossess and sell the essential construction equipment serving as collateral for the transaction.

On Oct. 23, 2013, Fitch downgraded the rating assigned to the notes from 'CC' to 'C', indicating default is imminent. The downgrade of the senior secured notes resulted from the termination of the service agreement (SA) with Corporacion Geo S.A.B. de C.V. as only source of payment of the notes. Since July 2013, timely payments of scheduled quarterly debt service have been made with funds from the transaction's reserve accounts. The current reserve balance is $10.8 million, which can support the next quarterly debt service payment of approximately $5.2 million scheduled in July 2014. The outstanding balance of the notes is $151.6 million following the $4.6 million scheduled quarterly debt service payment in April 2014.

Fitch's rating addresses timely payment of interest and principal according to the original schedule and does not include any potential acceleration amounts. A further rating action will be taken following either a failure to make a scheduled payment according to the documents or a restructuring of the original terms of the notes. If the notes are restructured or exchanged in an effort to avert a probable payment default, the rating on the notes will be lowered to 'D' to reflect that a distressed debt exchange has occurred according to Fitch's report 'Distressed Debt Exchange Criteria for Structured Finance'.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Distressed Debt Exchange Criteria for Structured Finance' (July 3, 2013);

--'Corporacion Geo, S.A.B. de C.V.' (May 17, 2013).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

Distressed Debt Exchange Criteria for Structured Finance

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=710471

Corporacion Geo, S.A.B. de C.V.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=585165

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Gregory Lane

Associate Director

+1-312-606-2304

Fitch Ratings, Inc.

70 W. Madison Street

Chicago, IL 60602

or

Secondary Analyst

Cinthya Ortega

Director

+1-312-606-2373

or

Media Relations

Elizabeth Fogerty, +1 212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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