Unifin Financiera SAB drove about a fifth of the trading in its own shares in the weeks before a crash that sent those shares and some $2.4 billion of bonds tumbling in Mexico’s largest non-bank lender.

From the end of June to August 4, a Unifin buyback fund spent 12.9 million pesos ($640,000) buying back 800,776 shares, according to stock exchange documents. That represents 22% of total volume during that period, data compiled by Bloomberg shows. In the previous 12 months, the company that leases equipment to small businesses spent almost $25 million to support the stock, while assuring investors that it had ample access to financing alternatives.

Unifin’s buybacks likely helped support the share price before its plunge and sparked surprise among bond investors when the company blew cash on the buys before telling the market it was in financial trouble.

Confidence in Mexico’s non-bank lenders collapsed this year after defaults by Credito Real SAB and Alpha Holding SA pushed down note prices for the sector. Foreign investors face losses of about $5 billion in global notes from Mexico’s non-bank lenders, sometimes known as shadow banks, as they don’t accept deposits and operate under less scrutiny than other financial institutions. In the years before the crisis, lenders had posted strong portfolio growth backed by an avalanche of global funding.

“It’s not surprising to see that kind of prank, from a Mexican company in financial trouble,” said Roger Horn, senior strategist at SMBC Nikko Securities America in New York.

Unifin chairman and majority shareholder Rodrigo Lebois is now leading restructuring talks with bondholders after stock and note prices plunged earlier this month as the company said it would suspend coupon payments. and equity. The firm argued that it had run out of financing options due to contagion throughout the sector and that some lines of credit could not be renewed. The company’s shares have lost about $830 million in market value since their January high, while bonds are now trading around 15 cents on the dollar.

The precipitous drop in share price before Unifin revealed it would stop payments would have prompted reports from both Mexico’s stock exchanges to the country’s securities regulator to look for signs of insider trading and manipulation, according to regulations.

An outside representative for the company declined to answer questions from Bloomberg News. Mexico’s securities regulator CNBV did not respond to a request for comment.

The buyback fund last operated on August 4. The next day, a Friday, Unifin’s trading volume jumped to 2.5 times the recent 15-day average as investors cashed in about $300,000 worth of shares.

On August 8, a Monday, another spike in trading sent the stock down 15%, causing a halt in trading. When a 15% move occurs, companies must submit a form disclosing knowledge of any reason for the move and certifying that no insiders have been trading before the suspension is lifted. Unifin never submitted such a document. Just before midnight, the company said it would stop bond payments.

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