Subsequent to obtaining a settlement with debtors in May and shareholder approval after the New York Southern District Court approved LATAM Airlines plans in June to exit Chapter 11 bankruptcy proceedings, the South American Group has confirmed it now has all financing in place to be able to exit these proceedings in the first week of November this year.
The Group has reported that together with Professional Airline Services, Inc., a Florida corporation and a wholly owned subsidiary of LATAM, it has set an original offering price of US$450 million of senior secured notes due 2027. US$700 million for the principal of senior secured bonds payable by 2029 with a coupon of 13.375%, 94.423% on an issue price, and 13.375% on an issue price of 93.103%. In addition, the Group has opted for ABR +8.50% or Adjusted Term SOFR +9.50% (after the exit of Chapter 11 – and before the effective date, ABR + 8.75%) with an interest rate of US$1.1 billion for the term. The Group has also secured a new revolving line of credit of approximately US$500 million.
It has also specified that it intends to sign the revolving credit line, term financing and bridge loan documentation on October 12, 2022 and disburse them as follows: Bridge loan on October 12, 2022. Regarding term financing: an initial amount of US$750 million as on October 12, 2022; and for the remaining US$350 million, at the date of the Chapter 11 exit process. (£1.00 = US$1.11 at time of publication).
