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(Updates with Newland statement in second paragraph)
Nov. 16 (Bloomberg) -- Newland International Properties defaulted on $220 million of bonds used to finance construction of Panama’s Trump Ocean Club.
Newland missed the $31.9 million amortization payment due yesterday while making a $10 million interest payment, John McCormack of Gapstone Group LLC, which is advising the developer on a debt restructuring, said in phone interview from New York. The global economic crisis and its impact on real estate prices caused Newland to miss the bond payment, the Panama City-based developer said in an e-mailed statement today.
Newland is working with 80 percent of bondholders on a debt restructuring plan, the statement said.
The price of the bonds that mature in 2014 rose 6.4 cents to 61.4 cents on the dollar yesterday from the day before, according to the latest data from Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Moody’s Investors Service downgraded the bonds on Oct. 20 to Caa3, nine levels below investment grade, from B3, citing the debt restructuring plan.
The Trump Ocean Club is Donald Trump’s first hotel and apartment complex to open outside the U.S.
--With assistance from Brendan Walsh in Mexico City. Editors: Brendan Walsh, Marie-France Han
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