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LATAM returns for aircraft-backed financing

Por: Latin LawyerImprimirVisualizar em PDF

Brazil's Pinheiro Neto Advogados and Philippi Prietocarrizosa Ferrero DU & Uría (Chile) have helped LATAM Airlines obtain a US$275 million revolving credit facility backed by its aircraft, months after the airline became the first in Latin America to use aircraft to secure a debt issuance.

Milbank, Tweed, Hadley & McCloy LLP advised the lenders of the loan; Citigroup acted as structuring agent and sole bookrunner, while Citibank was mandated lead arranger. Pinheiro Neto and Philippi Prietocarrizosa  were also local counsel to the banks, as well as advising LATAM. The airline is also thought to have worked with Norton Rose Fulbright, but this was not confirmed before publication.

The loan is aimed at maintaining liquidity while Latin America's aviation sector remains volatile. Economic recession, dipping foreign investment and currency fluctuations in countries across Latin America have put pressure on the region's aviation industry. The credit facility is backed by a mix of engines, aircraft and spare parts, following a novel financing package LATAM agreed in June, which saw it become the first airline in Latin America to use such assets to back an enhanced equipment trust certificates offering worth US$1 billion.

The loan relies on nine aircraft, 20 engines and more than 500,000 spare parts, including seatbelts and landing gears. The collateral is spread over three main jurisdictions: the US, Brazil and Chile.

 

Counsel to LATAM Airlines

Pinheiro Neto Advogados - Partner Fernando Almeida Prado and associates Caroline Queiroz, Felipe Veneziano and Ricardo Rodrigues in São Paulo

Philippi Prietocarrizosa Ferrero DU & Uría (Chile) - Partner Marcelo Armas and associates Daniel Parodi and Isidora Edwards in Santiago

 

Counsel to Citigroup Global Markets Inc, Citibank, BancoEstado, Bank of America Merrill Lynch, JP Morgan, Deutsche Bank, BNP Paribas, Morgan Stanley, Deutsche Bank and Banco Alemão

Milbank, Tweed, Hadley & McCloy LLP - Partners Elihu Robertson and James Pascale and associate Dylan Scher in New York

Pinheiro Neto Advogados - Partner Fernando Almeida Prado and associates Caroline Queiroz, Felipe Veneziano and Ricardo Rodrigues in São Paulo

Philippi Prietocarrizosa Ferrero DU & Uría (Chile) - Partner Marcelo Armas and associates Daniel Parodi and Isidora Edwards in Santiago

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