Azul SA, one of Brazil’s largest airlines, is tapping the local debt market for about $325 million of convertible debt with the backing of U.S.-based investment funds Knighthead Capital Management and Certares Management, Bloomberg reported. The five-year bonds are denominated in Brazilian reais but indexed to the dollar. Knighthead and Certares are supplying $300 million, which comes from a $1 billion joint fund they created this year to invest in the travel industry, a sector that’s been decimated by the COVID-19 pandemic. The remaining $25 million is being absorbed by the local market. The sale gives low-cost carrier Azul an added cushion as it navigates a drop in air travel that’s prompted Chapter 11 bankruptcies for three of the region’s largest airlines — Latam Airlines Group SA, Avianca Holdings SA and Grupo Aeromexico SA.
With the COVID-19 pandemic grinding international travel to a halt, experts on an online panel at ABI’s International Insolvency Forum set for Nov. 18-20 will provide their insights into distressed non-U.S. airlines filing for chapter 11 protection, and how their cases may differ from domestic carriers. Click here to register.
