Avianca announces bond swap

Avianca announces bond swap

Bonds Debt Capital Markets Corporate & Sovereign Strategy Fixed Income Colombia US

Colombia's Avianca said it has asked investors to exchange $550m in unsecured 8.375% 2020 notes for the same amount in 9% 2023 notes.

Bondholders who swap their notes by the early deadline on August 27 will receive an even exchange. After that, they will get $950 for every $1,000 in existing notes through the final deadline on September 11, the airline said in a statement.

Avianca said it will use roughly $1bn in aircraft as collateral for the new notes. Avianca shareholders United Airlines and Kingsland Holdings will provide a loan for at least $200m as part of the deal, while one or more banks will supply $50m.

Avianca has had to look for financing alternatives as a recent ratings downgrade and a worsening business outlook has made issuing new notes in the cross-border market too expensive.

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