LATAM taps markets with ECGD guaranteed bond

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LATAM Airlines Group has issued a $137.7 million bond guaranteed by the UK's Exports Credit Guaranteed Department (ECGD) to refinance four Airbus A320 aircraft that delivered between September and December last year.

The Latin carrier issued the bond through a vehicle, Carpintero Finance Limited. The 12-year bond was priced at par with a 2.004% coupon, market swaps + 90 basis points.

BNP Paribas and Santander were book runners and underwriters.

The deal is the second bond issuance this year for Airbus aircraft. At the end of February, Emirates Airline tapped the market with a Coface-guaranteed bond refinancing a new Airbus A380. The $187 million transaction priced at 2.341% in a deal arranged by JPMorgan.

Last year, the carrier, formed by a merger of Chile's LAN and Brazil's TAM, was the biggest issuer of US Export-Import (Ex-Im) Bank-guaranteed bonds with an estimated $1.8 billion worth of deals, according to data compiled by Flightglobal.

It raised $954 million through three Ex-Im-backed issuances covering six Boeing 767-300ERs, two 777-300ERs, one 777F and one 787 aircraft during the first nine months of 2012. It tapped the capital market for another $850 million during the October-December period.

One issuance, priced by JP Morgan, was the first floating-rate US dollar bond with a full Ex-Im guarantee. The 12-year $212.3 million bond closed at Libor +33 basis points and refinanced the deliveries of three 767-300ERs in 2011.

The group issued the first pre-funded bond in July, selling $299.2 million of debt in an offering managed by JPMorgan. The transaction refinanced two 767-300ERs and funded the acquisition of two additional aircraft of the type.