Azul S.A. Announces Results of Exchange Offer and Consent Solicitation for 11.930% Senior Secured First Out Notes
São Paulo, Brazil, January 22, 2025 – Azul S.A. (“Azul”), a leading airline in Brazil (B3: AZUL4, NYSE: AZUL), today announced the expiration and final results of the previously announced offer by its wholly-owned subsidiary Azul Secured Finance LLP (“Issuer”) to Eligible Holders to exchange any and all of the outstanding 11.930% Senior Secured First Out Notes due 2028 issued by the Issuer (CUSIP: 05501W AC6 / U0551Y AC9, ISIN: US05501WAC64/USU0551YAC94) (the “Existing Notes”) for newly issued 11.930% Senior Secured First Out Notes due 2028 to be issued by the Issuer (the “New Notes”) and solicitation of consents by the Issuer from Eligible Holders to certain proposed amendments to the terms of the Existing Notes (the “Solicitation”).
Exchange Offer Results
The Exchange Offer expired at 5:00 p.m., New York City time, on January 21, 2025 (the “Expiration Time”). A total of approximately $609.5 million in aggregate principal amount of the Existing Notes were validly tendered and not validly withdrawn prior to the Expiration Time. The New Notes will be issued to Eligible Holders who validly tendered and did not validly withdraw their Existing Notes prior to the Expiration Time. The New Notes will be fungible with, and form a single class of debt securities with, the existing 11.930% Senior Secured First Out Notes due 2028 issued by the Issuer.
Consents and Amendments
As of the Expiration Time, consents were received from holders of approximately $609.5 million in aggregate principal amount of the Existing Notes to the proposed amendments, representing more than the required 66.67% of the outstanding aggregate principal amount of the Existing Notes. The proposed amendments include, among other things, the elimination of certain restrictive covenants and the modification of certain definitions and provisions relating to the calculation of certain financial covenants.
Effect on Individual Investors
For individual investors who participated in the Exchange Offer, this means that they have exchanged their old Existing Notes for new Notes with identical terms, but with the added benefit of the amendments to the terms of the Notes. This may result in a more flexible debt structure for Azul, potentially making the company more attractive to investors and improving its financial position. However, investors should consult their financial advisors to understand the specific implications of this transaction on their individual portfolios.
Effect on the World
On a larger scale, this transaction highlights the ongoing trend of companies seeking to restructure their debt in response to changing market conditions. The aviation industry, in particular, has been heavily impacted by the COVID-19 pandemic, and Azul’s decision to offer exchange offers and solicit consents to amendments is a common strategy used by companies to improve their financial flexibility and position themselves for long-term success. This transaction may also serve as a signal to other companies in the industry and beyond that the debt markets remain open for restructuring opportunities.
- Azul S.A. announces results of Exchange Offer and Consent Solicitation for 11.930% Senior Secured First Out Notes.
- Approximately $609.5 million in Existing Notes were tendered and not withdrawn prior to the Expiration Time.
- New Notes will be issued to Eligible Holders who validly tendered and did not validly withdraw their Existing Notes.
- Consents were received from holders of approximately $609.5 million in aggregate principal amount of the Existing Notes to the proposed amendments.
- Individual investors who participated in the Exchange Offer have exchanged their old Existing Notes for new Notes with identical terms, but with the added benefit of the amendments to the terms of the Notes.
- This transaction highlights the ongoing trend of companies seeking to restructure their debt in response to changing market conditions.
Conclusion
In conclusion, Azul S.A.’s announcement of the results of its Exchange Offer and Consent Solicitation for its 11.930% Senior Secured First Out Notes marks an important step in the company’s ongoing efforts to improve its financial position and adapt to the evolving market conditions. The transaction allows individual investors to exchange their old Existing Notes for new Notes with identical terms, but with the added benefit of the amendments to the terms of the Notes. Furthermore, the transaction highlights the ongoing trend of companies seeking to restructure their debt and serves as a signal to other companies in the industry and beyond that the debt markets remain open for restructuring opportunities.
As always, investors are encouraged to consult their financial advisors to understand the specific implications of this transaction on their individual portfolios.
