Yabora’s four tranches of notes amended for Embraer guarantee

By Rebecca Melvin

New York, March 11 – Yabora Industria Aeronautica SA, a subsidiary of Embraer SA, and Embraer have entered into supplemental indentures regarding four series of notes, putting in place Embraer guarantees to cover all payments associated with the notes in light of a new joint venture affecting the companies.

Yabora said that it was soliciting consents of the holders of its:

• $500 million outstanding 5.15% notes due 2022;

• $540,518,000 outstanding 5.696% notes due 2023;

• $1 billion outstanding 5.05% notes due 2025;

• $750 million outstanding 5.4% notes due 2027.

But the terms of the indentures governing these notes permitted the amendments to be entered into without holder consent, so the guarantees went into effect on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The Yabora solicitation will expire at 5 p.m. ET on March 16, unless extended by Yabora, according to company news release. The information and tabulation agent for the consent solicitation is Global Bondholder Services Corp.

The amendments to the bonds’ indentures were sought in connection with a joint venture between Embraer and Boeing Co. for a strategic partnership involving Embraer’s commercial aviation business. Yabora will hold the commercial aviation assets of Embraer and Boeing that are part of the joint venture. Embraer will hold 20% of the share capital of Yabora and Boeing will hold 80% of the share capital.

Upon consummation of the joint venture, Yabora intends to delist the New York Stock Exchange listed notes and suspend Yabora’s regulatory reporting obligations

Under the new guarantees, Embraer guarantees payment obligations under the notes and the indentures governing the notes. The terms of the supplemental indentures provide, among other things, that the new Embraer guarantees shall automatically terminate on the date that Embraer ceases to own 100% of the share capital of Yabora.

Embraer is a Brazilian aerospace conglomerate that products commercial, military and other aircraft and provides aeronautical services.

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