(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.
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