By Paul A. Harris
Portland, Ore., Oct. 11 – Chile-based Latam Airlines Group SA priced a downsized $1.15 billion amount of senior secured notes (S&P: B-) in two tranches on Tuesday, according to market sources.
The deal included a downsized $450 million tranche of 13 3/8% five-year notes that priced at 94.423 to yield 15%. The tranche was downsized from $500 million after having previously been downsized from $750 million. The coupon, price and yield all came on top of talk. Initial guidance had the five-year notes coming to yield in the low 13% area.
The deal also included a downsized $700 million tranche of 13 3/8% seven-year notes that priced at 93.103 to yield 15%. The tranche was downsized from $750 million. The coupon, price and yield all came on top of talk. Initial guidance had the seven-year notes coming to yield in the low-to-mid 13% area.
The overall amount of notes issuance decreased from $1.5 billion.
The five-year notes traded to 95½ bid, 96¼ offered (issue price was 94.423), while the seven-year notes traded to 94½ bid, 95¼ offered (issue price was 93.103), according to a portfolio manager.
Color on the final demand varied, with some market sources maintaining that the book was just over deal size, while others said the book was well over deal size.
In the end the company shifted proceeds to the loan because it has greater pre-payability than the bonds, the portfolio manager said.
JPMorgan was the lead.
The credit’s emerging markets provenance notwithstanding, U.S. high-yield accounts were expected to participate in the deal because many of them participated in the Latam Airlines debtor-in-possession financing, sources say.
The airline holding company, which is based in Santiago, plans to use the proceeds to repay the DIP loans and for general corporate purposes.
The financing also included an upsized $1.1 billion term loan B (from upsized from $1 billion after having previously been upsized from $750 million).
Commitments were due late Tuesday morning.
Latam Airlines filed for Chapter 11 bankruptcy protection in May 2020.
The bankruptcy court approved its restructuring in June 2022.
| Issuer: | Latam Airlines Group SA
|
| Amount: | $1.15 billion, decreased from $1.25 billion and originally from $1.5 billion
|
| Issue: | Senior secured notes
|
| Lead: | JPMorgan
|
| Trade date: | Oct. 11
|
| Rating: | S&P: B-
|
| Marketing: | Roadshow
|
|
|
| Five-year notes
|
| Amount: | $450 million, decreased from $500 million and originally from $750 million
|
| Tenor: | Five years
|
| Coupon: | 13 3/8%
|
| Price: | 94.423
|
| Yield: | 15%
|
| Call protection: | Two years
|
| Price talk: | 13 3/8% coupon at 94.423 to yield 15%
|
|
|
| Seven-year notes
|
| Amount: | $700 million, decreased from $750 million
|
| Tenor: | Seven years
|
| Coupon: | 13 3/8%
|
| Price: | 93.103
|
| Yield: | 15%
|
| Call protection: | Three years
|
| Price talk: | 13 3/8% coupon at 93.103 to yield 15%
|
|
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