Latam Airlines brings $1.5 billion two-part secured notes offering to repay bankruptcy financing

By Paul A. Harris

Portland, Ore., Sept. 22 – Chile-based Latam Airlines Group SA began a roadshow for a $1.5 billion two-part offering of senior secured notes related to its exit from Chapter 11 bankruptcy during the past summer, according to market sources.

The deal features five-year notes with two years of call protection and seven-year notes with three years of call protection.

Tranche sizes remain to be determined.

Early guidance was heard to be in the low 13% area for the five-year notes and in the low-to-mid 13% area for the seven-year notes.

As much as 40% of the deal is spoken for in reverse inquiry across both tranches, a sellside source said.

The credit’s emerging markets provenance notwithstanding, U.S. high-yield accounts are expected to participate in the deal because many of them participated in the Latam Airlines debtor-in-possession financing, sources say.

The deal is expected to price during the Oct. 3 week.

JPMorgan is leading the notes sale.

The financing also includes a $750 million term loan B.

The airline holding company, which is based in Santiago, plans to use the proceeds to repay the DIP loans and for general corporate purposes.

Latam Airlines filed for Chapter 11 bankruptcy protection in May 2020.

The bankruptcy court approved its restructuring in June 2022.

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