Chile’s Latam collects early tenders for 65.31% of TAM’s 9½% notes

By Susanna Moon

Chicago, June 5 – Latam Airlines Group SA said investors had tendered $195,938,000 principal amount, or 65.31%, of the $300 million 9½% senior guaranteed notes due 2020 as of 5 p.m. ET on June 4, the early tender date.

Latam said in May that Citigroup Global Markets Inc. began a tender offer for the notes issued by TAM Capital 2 Inc. and guaranteed by TAM SA and TAM Linhas Aereas SA.

The company also is soliciting consents to an amendment to eliminate substantially all of the restrictive covenants and events of default and to shorten the minimum redemption period to five business days from 30 days and to an amendment that would eliminate the limitations on the company covenant.

The first amendment requires consents from holders of a majority of the outstanding notes, and the second amendment requires consents from holders of at least 66 2/3% of the notes.

As a result, the issuer will execute a supplemental indenture to the notes for the majority consents amendments, according to a company notice.

The total purchase price will be $1,053 for each $1,000 principal amount of notes tendered by the early tender deadline. The total amount will include a $30 early tender premium per $1,000 principal amount.

Those who tender after the early deadline will receive $1,023 per $1,000 of notes.

The company also will pay accrued interest to the payment date.

The tender offer and consent solicitation will end at 11:59 p.m. ET on June 18.

The issuer plans to redeem any notes that remain outstanding after the early settlement date at a price of $1,047.50 per $1,000 principal amount plus accrued interest to the redemption date.

Notes purchased in the tender by Citigroup will be exchanged with Latam Airlines for notes issued in a new offering of bonds by Latam.

The dealer manager is Citigroup Global Markets (800 558-3745 or 212 723-6106). The information agent and tender agent is Global Bondholder Services Corp. (212 430-3774, 866 470-3900 or contact@gbsc-usa.com).

Bank of New York Mellon is trustee, registrar, transfer agent and principal paying agent, with Bank of New York Mellon (Luxembourg) SA as Luxembourg transfer agent.

Latam is a Santiago, Chile-based airline holding company. TAM is an aviation company based in Sao Paulo.

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