LATAM Airlines Group priced a $450 million securitisation with a 6% coupon.
The senior secured fixed-rate notes are backed by US and Canadian dollar-denominated receivables from ticket and cargo sales generated by credit, debit or charge cards in the United States and Canada.
The notes were issued by Guanay Finance, a special purpose vehicle incorporated in the Cayman Islands and sponsored by LATAM Airlines Group.
The bond has a seven-year maturity including two-year period of interest only, five years of amortization, and a duration of 4.75 years.
Fitch Ratings assigned a 'BB+' rating to the notes with a ‘stable’ outlook.
The issuance represents approximately 4.4% of LATAM's consolidated debt and 6.8% of unconsolidated debt (excluding TAM Linhas Aereas). “While these percentages are low relative to the balance sheet, the transaction size is large compared to the company's total unsecured debt, as most of company debt relates to leases and secured debt,” says Fitch Ratings.
LATAM mandated Citigroup Global Markets and Merrill Lynch, Pierce, Fenner & Smith for the transaction.