Azul Linhas Aéreas has made headlines with its announcement of reopening its debt issuance, set to mature in 2028. This strategic financial maneuver was announced on the evening of January 5th by its subsidiary, Azul Secured Finance LLP, a Delaware limited liability company.
The reopened debt issuance is valued at $148.7 million in aggregate principal amount, featuring an 11.930% coupon rate. It was quoted at 100.625% of the principal amount, indicating a yield to maturity of 11.749%. This move is seen as a way for Azul to strengthen its financial position by taking advantage of the debt market under favorable terms.
Azul’s new debt obligations are secured by the company and its subsidiaries, including Azul Linhas Aéreas Brasileiras S.A., IntelAzul S.A., ATS Viagens e Turismo Ltda., Azul IP Cayman Holdco Ltd., and Azul IP Cayman Ltd. The security package for this debt includes receivables from TudoAzul, Azul’s loyalty program, Azul Viagens, the company’s travel package business, and certain trademarks, domain names, and other intellectual properties used by Azul’s air operations (excluding Azul Cargo), TudoAzul, and Azul Viagens.
The airline intends to use the net proceeds from this issuance to refinance existing debts, showcasing Azul’s proactive approach to managing its financial obligations and improving its liquidity position. The completion of the issuance is anticipated on February 8, 2024, subject to customary closing conditions.
