Avianca's $300m notes deal for fleet funding rated 'B+/RR5'

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London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Fitch has also assigned an expected senior unsecured rating of "B+/RR5" to the proposed issuance of $300 million of notes to be issued by Avianca Holdings and its subsidiaries Grupo Taca and Avianca Leasing.

Proceeds from the note issuance will be used primarily to fund the company's fleet capital expenditure, says Fitch.

The "B+/RR5" rating of the company's proposed unsecured notes incorporate the subordination of the proposed unsecured notes with respect to significant levels of secured debt, and below the average recovery prospects in the event of default, says Fitch.

The notes will be fully and unconditionally guaranteed - on an unsecured, senior basis - by three of Avianca Holdings' subsidiaries, Taca International Airlines, Líneas Aéreas Costarricences (LACSA) in Costa Rica and Transamerican Airlines in Peru.

Avianca Leasing's obligations as a co-issuer of the notes will be unconditionally guaranteed - on an unsecured, senior basis - by Avianca Holdings' subsidiary Aerovias del Continente Americano up to an amount equal to the proceeds of the offering of the notes to purchase aircraft, which is estimated to be approximately $200 million, notes Fitch.