AA2000 negotiates more time to pay loan

AA2000 negotiates more time to pay loan

Loans Debt Corporate & Sovereign Strategy Economy & Policy Coronavirus Bonds Capital Markets Asset Management Funds Fixed Income Project & Infrastructure Finance Argentina Latin America

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Aeropuertos Argentina 2000 (AA2000) said it has reached a framework agreement with a syndicate of four banks to defer payments on a three-year, $120 million debt facility, a latest effort to mitigate the impact of the COVID-19 pandemic on traffic at the airports in operates in Argentina.

The airport concessionaire said it wants to defer payments on the facility due in August and November of this year, according to regulatory filing late Wednesday.

AA2000 took out a two-part facility in August 2019 from Citi, ICBC, Galicia and Santander, divided into a local line of credit for $85 million at a fixed rate of 9.75% per year and a foreign line for $35 million at 550 basis points over Libor. It used the money to fund construction works at airports in its portfolio. The company operates 35 airports in Argentina.

Approval of the deferment hinges on AA2000 completing a proposed bond swap with more than 75% acceptance from holders of $400 million in outstanding in 6.875% 2027 bonds.

The swap, announced on April 21 and due to be completed on May 18, will exchange the existing 2027 bonds for similar notes that offer a higher yield in the short term and then put off payments for a year, helping the company get through a period of low demand.

Air traffic plunged after the federal government closed borders and locked down the economy in March to try to prevent the spread of the coronavirus. The lockdown has been extended until May 10 and international travel has been banned until September 1.

AA2000 said that with the swap and the deferment in loan payments it wants to preserve cash until passenger traffic and revenues improve, when it can resume debt payments.

Corporación América, held by billionaire Eduardo Eurnekian, owns 75.7% of AA2000, while the federal government has 15%, Italy's Gruppo SEA has 8.5% and the local construction company Riva has 0.85%.