March 05 2009
Cap Cana Loses Rudder
Once celebrated as groundbreaking, Cap Cana’s 2006 structured bond is a battleground for some LatAm bondholders. Cap Cana says it seeks a pragmatic solution.
by Dan Shirai
Cap Cana has its back up against a wall. The Dominican developer has an enormous high-end resort still in need of significant investment and it is fast running out of cash. Some investors say it should never have got itself into this situation since the bond providing the funds was supposedly structured to eliminate this risk. But in January, Cap Cana entered technical default by failing to replenish a debt service reserve account.
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