Gol launched an up to $345 million exchangeable senior notes transaction today, with proceeds aimed at boosting liquidity.
The unsecured notes are issued by Gol-subsidiary Gol Equity Finance and guaranteed by the airline, Sao Paulo-based Gol says in a statement. They are due in 2024.
The transaction includes a $300 million issuance plus the option to initial purchasers to acquire up to $45 million in additional bonds from the airline.
The exchangeable bond issue comes the same day as a one notch ratings upgrade to B1 by Moody's Investors Service. The rating agency cites Gol's "improvements in operating performance, credit metrics and financial flexibility in an evolving macroeconomic environment" for the upgrade.
The rating agency rates the exchangeable bonds one notch lower at B2, citing their subordination to the carrier's secured debt in the event of a default.
Proceeds from the exchangeable bonds will be used to improve liquidity, for liability management and debt amortisation, and to increase profitability, says Moody's.
In addition to the bond issue, Gol will concurrently offer up to 14 million American Depositary Shares (ADS) through one of the initial purchasers of the bond. The proceeds of the sale will be used to "facilitate privately negotiated derivatives transactions related to the notes", the airline says adding that it will not receive any cash from the sale.
Bank of America Merrill Lynch, Morgan Stanley and Evercore ISI are global coordinators of the ADS sale, a prospectus shows. BTG Pactual, Deutsche Bank, Credit Agricole, BCP Securities, Nomura, Bradesco BBI, Santander, The Buckingham Research Group and BB Securities are joint bookrunners.