Grupo Posadas in Restructuring Agreement With Key Noteholder Group

August 17, 2021

Cleary Gottlieb is representing Grupo Posadas, Mexico’s largest hotel operator, in its agreement with an ad hoc group of holders to restructure the terms of its 7.875% senior notes due 2022, which, together with an additional group of holders who have expressed their support for the agreement, collectively represent more than a majority of the aggregate principal amount of the existing notes.

The agreement was announced on August 17, 2021.

The agreement, which is subject to, among other things, the negotiation of definitive documentation, contemplates the exchange of the existing notes for new senior notes that will be secured by liens on real estate and certain accounts receivable of the company. The transaction will extend the maturity of the company’s note obligations by 5.5 years, to December 30, 2027, achieving a capital structure that is sustainable and allowing the company to prioritize the use of cash for operating activities to preserve employment and help maintain the high quality for which Grupo Posadas hotels are known. This will enable the company to emerge from the pandemic in a stronger financial position and remain Mexico’s leading hotel operator. To implement the transaction, the ad hoc group has agreed to support the company’s initiation of a prepackaged in-court restructuring proceeding in the U.S. and has entered into a restructuring support agreement with the company to facilitate that process in the most efficient manner.

For more information, please see the press release here.