Copa prices private placement

Copa prices private placement

Asset Management Bonds Debt Capital Markets Fixed Income Funds Coronavirus Rule 144a/ RegS Panama Central America US Latin America

Editor's note: LatinFinance is making some of its most important coronavirus-related material freely available to all readers. Visit our coronavirus section for all our coverage and sign up to receive the Daily Brief newsletter in your inbox every morning.

Panamanian airline Copa Airlines said on Tuesday that it priced a private placement of at least $350 million in five-year bonds with a coupon of 4.5%.

The airline also gave the buyers 13 days to acquire an additional $52.5 million of the new notes at the same terms under Rule 144A, it said in a press release.

Copa did not identify the investors, but it said they can convert their notes into shares, starting in October 2024, at an initial rate of 19.4 common shares for every $1,000 in principal, equal to a price of $51.66 per share.

The conversion price represents a premium of 25% over Copa's closing share price of $41.33 on Monday, the airline added. Shares in Copa rose 4.45% to $43.17 on Tuesday.

Copa said it plans to clear at least $343 million from the deal, or as much as $394 million if the buyers acquire all the additional bonds on offer. It added that it will use the money for general corporate purposes, but it did not provide details.

Bank of America, Citi and JPMorgan were the bookrunners on Copa's private placement, according to sources.

With travel restrictions during the coronavirus pandemic cutting into the airline's earnings, Copa took out $145 million in 12-month loans in March and another $150 million in April.

The company has said it expects revenues to drop 11.4% to $596 million in the first quarter this year, compared to the same period last year, after revenue passenger miles fell 43.4% year-on-year in March.

Copa has not operated commercial flights since March 22 and it anticipates that the earliest it can resume commercial operations is June 1.