Avianca Holdings Files For U.S. Court Approval Of $2 Bln DIP Financing

(RTTNews) - Airline holding company Avianca Holdings S.A. (AVHOQ) announced Tuesday that it has secured commitments for debtor-in-possession or DIP financing totaling just over $2.0 billion.

The Colombia-based company has filed a motion to approve the financing in the U.S. Bankruptcy Court for the Southern District of New York.

The financing is subject to U.S. Court approval, with a hearing scheduled for October 5, 2020, and other customary conditions.

The DIP financing is inclusive of rollups of existing debt and purchase loan consideration. It consists of a $1.27 billion Tranche A senior loan and a $722 million Tranche B subordinated loan.

The DIP financing includes approximately $1.217 billion of new funds consisting of $881 million in Tranche A and $336 million in Tranche B.

Avianca noted that on August 28, as part of syndicating the Tranche A DIP loan, it entered into a Restructuring Support Agreement or RSA with an ad hoc group of holders representing a majority of Avianca's 2023 senior secured notes. They will provide $290 million in new funds, inclusive of $63 million of backstop, and roll up $220 million of their existing notes into Tranche A.

Of the Tranche A financing, $240 million has been structured as a backstop commitment, to allow for the eventual participation of one or more governments.

The $722 million Tranche B DIP loan includes $336 million of new money financing, as well as a rollup of approximately $386 million of secured convertible debt issued in December 2019 and January 2020.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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