Homex
Thesis
The 9.75% senior guaranteed 2020 USD notes of Homex are expected to provide a strong return due to their guaranteed nature and the company's potential for recovery in the housing market.
Did it work?
The thesis rested on the 'guaranteed' nature of Homex's 9.75% 2020 notes protecting investors while the Mexican housing market recovered. Instead, Homex's distress deepened: the company missed payments and entered Mexican conciliatorio/bankruptcy (concurso mercantil) proceedings in 2015, and the notes were swept into distressed restructurings, meaning the guarantee did not deliver the promised protection and the recovery thesis did not materialize. With no price data available, confidence is low, but the core thesis events were effectively invalidated rather than confirmed.