Azul to price R$1.6 billion five-year convertible debentures

By Abigail W. Adams

Portland, Me., Oct. 26 – Azul SA plans to price R$1.6 billion of five-year convertible debentures in a public offering marketed in Brazil, according to a 6-K filing with the Securities and Exchange Commission.

The debentures will bear interest of 7.5% for the first year through an increase in the par value of the debentures. Thereafter, the debentures will bear interest of 6%.

The initial conversion rate will be 27.5% above the volume-weighted average share price over a 30-day period.

The debentures carry a greenshoe of 20%.

Knighthead Capital Management, LLC and Certares Management, LLC have agreed to purchase R$1.6 billion to R$1.8 billion of the offering and will submit an order of R$560 million if another offering is launched on similar terms in the next year, according to the filing.

Azul is a Sao Paulo-based airline.

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