SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Colombian carrier Avianca Holdings SA seeks to raise $1.8bn to repay debt and provide new financing in a move to exit from bankruptcy reorganization that the company was forced into as a result of the pandemic’s travel collapse. Seabury Securities LLC has been retained to help raise the exit financing, predicted to be a combination of debt and equity. Avianca plans to refinance $1.4bn in loans and hold about $1bn in liquidity with the exit strategy. Avianca raised $900mn via a group of investors that include United Airlines, Citadel Advisors LLC and Roberto Kriete. Avianca is negotiating the final terms to turn the funds into equity as it builds its new capital structure. It is yet unclear whether the value of existing shares will be diluted. Avianca predicted that with the exit financing, costs will be significantly reduced, with around 300 initiatives saving an estimated $500mn annually, helping reduce leverage to under 3x EBITDA from 5.8x in late 2019. Prior to the pandemic, Avianca was Latin America’s second-largest airline. In May 2020, Avianca filed for Chapter 11 bankruptcy protection in a New York court.

Avianca´s dollar bonds were up – its 9% 2023s up 1.06 to 10.625, yielding 188.31%.

For the full story, click here

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