💥New Chapter 11 Bankruptcy - Credivalores - Crediservicios S.A.💥

Financial services provider executes a financial restructuring.

On May 16, 2024, Colombia-based Credivalores - Crediservicios S.A. (the “debtor”) filed a prepackaged chapter 11 bankruptcy case in the Southern District of New York (Judge Jones). The purpose of the filing, we learn from the first day declaration of CEO Jaime Francisco Buriticá Leal, is a pure financial restructuring of the debtor’s’ $210mm ‘25 8.875% senior unsecured notes. The debtor’s pre-petition solicitation yielded approval from 81% in amount and 96% in number of the holders of the senior unsecured notes —the only voting class. The debtor’s $95mm of secured claims, collateralized by payroll loan or credit card card receivables, are unimpaired.

Payroll loan? Yes, you read that right. Tucrédito, in the local argot, is the nearest equivalent to what, in America, might be referred to as a “payday loan” or “title loan,” — often offered in far too many strip-mall storefronts in asset-stripped ex-manufacturing towns. Such loans — “flexible, specialized and tailored credit and financing alternatives” — account for 35% of total consumer loans in Colombia, Buriticá tells us, and are designed for “…the less-privileged segments of the Colombian population that is not served by traditional banks in small and mid-sized cities.”  Once again, the U.S. leads and the world follows. The debtor does its bit to make it all very seamless for all those damned to live in such banking deserts; it “...contracts directly with employers in Colombia to offer such loans to the employer’s employees,” and the repayments are deducted directly from the paycheck. How magnificently convenient! American levels of efficiency, there!!