|Fitch Ratings has downgraded the rating on Cap Cana, S.A.'s (Cap Cana) $250 million senior secured notes due 2013 (the 2013s) from 'CCC/RR4' to 'D' and subsequently withdrawn the rating.
The action follows the completion of a successful debt exchange on May 8, 2009 that effectively retired the 2013s. The terms of the debt exchange are considered a default on the 2013s per Fitch's 'Coercive Debt Exchange Criteria', published on March 3, 2009.
Approximately 96% of Noteholders voted for the exchange. As part of the exchange, Cap Cana issued two series of new notes due in 2016. The above rating is not applicable to the Cap Cana S.A. new notes due 2016, which have not been rated to date.
Cap Cana, a 30,000-acre luxury, is a second-home real estate project under development and is located on the easternmost tip of the Dominican Republic. The company experienced financial troubles in 2008 as a result of the global economic downturn which severely affected access to capital as well as the project's sales environment, and as a result had to restructure its debts.(source DominicanToday)
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Dominican Broker and Developer Conspiracy (Part 1)
It was 2007 when the writing was clearly on the wall in the US, that I ventured to see for myself what all the hype was all about in the Wild Wild West of Punta Cana. It came as no surprise that I landed in a scammer's paradise of "NO RULES" or "AUTHORTY" -- where the fever was in full epidemic and the delirium of lies and distortions were so deep you needed rubber boots.
Coming from the pandemic ground zero of South Florida, I tried my best to warn of the bubble that was already popping, but everyone was too bullish to listen to such negativity. I was persona non grata for preaching the end was here! It was depressing that with all the projects, I couldn't find one single one to recommend to Buyers. Not one single one passed my reliability test.
Punta Perla was a scam from day one and anyone who did a normal due diligence would know it. Cap Cana was Disneyland for speculators and not users and would end up busted as they are now. Roco Ki sounded great but I have never seen such lousy marketing, which is a sign of impending doom. The list goes on and on with nothing but disasters wasting good land.
But it isn't fair for me to be so bold when I have a 30 year perspective over most of all these over-night Developers and Brokers, who are carving out their slice of the pie. What is troubling the most is that the conspiracy to defraud continues today, with projects that are under-capitalized and asking Buyers to hand over Deposits and Brokers endorsing them, --who would sell their mother if they could just to survive today. I can't believe I still hear about the "Boom" and "preconstruction appreciation" even after the party obviously ended and even the lights are now off. Somebody should really put these people out of their misery once and for all, because they are not only ruining the industry already damaged, -- but are just trolling for the weakest and most gullible victims who will probably not sue out of embarrassment for being so stupid.
TO BE CONTINUED-