Azul Announces Exchange Offer in respect of Existing 2028 First Out Notes for New Notes and Solicitation of Consents to Proposed Amendments to the Existing Indenture
Azul announced that its subsidiary Azul Secured Finance LLP has launched an exchange offer for all outstanding 11.930% Senior Secured First Out Notes due 2028. Eligible holders can exchange existing notes for new notes with the same interest rate and maturity. The exchange offer includes an early participation premium and a November 2024 PIK interest cash payment.
The early participation deadline is January 7, 2025, with a final expiration on January 15, 2025. The exchange requires minimum participation of 66.67% of outstanding notes. Supporting noteholders representing over 66.67% have already agreed to participate. The settlement is expected on January 22, 2025, coinciding with the closing of Superpriority Notes.
Azul ha annunciato che la sua controllata Azul Secured Finance LLP ha lanciato un'offerta di scambio per tutte le note senior garantite del 11,930% First Out in circolazione, in scadenza nel 2028. I possessori idonei possono scambiare le note esistenti con nuove note che hanno lo stesso tasso di interesse e scadenza. L'offerta di scambio include un premio per la partecipazione anticipata e un pagamento in contante degli interessi PIK a novembre 2024.
La scadenza per la partecipazione anticipata è il 7 gennaio 2025, con una scadenza finale il 15 gennaio 2025. Lo scambio richiede una partecipazione minima del 66,67% delle note in circolazione. I possessori di note a sostegno, che rappresentano oltre il 66,67%, hanno già accettato di partecipare. Il regolamento è previsto per il 22 gennaio 2025, in coincidenza con la chiusura delle note Superpriority.
Azul anunció que su filial Azul Secured Finance LLP ha lanzado una oferta de intercambio para todas las Notas Senior Garantizadas del 11,930% First Out que vencen en 2028. Los tenedores elegibles pueden intercambiar las notas existentes por nuevas notas con la misma tasa de interés y vencimiento. La oferta de intercambio incluye una prima por participación anticipada y un pago en efectivo de intereses PIK en noviembre de 2024.
La fecha límite para la participación anticipada es el 7 de enero de 2025, con una expiración final el 15 de enero de 2025. El intercambio requiere una participación mínima del 66,67% de las notas en circulación. Los tenedores de notas de soporte que representan más del 66,67% ya han acordado participar. Se espera que el liquidación ocurra el 22 de enero de 2025, coincidiendo con el cierre de las Notas Superpriority.
아줄은 그 자회사인 아줄 세큐어드 파이낸스 LLP가 2028년 만기 11.930% 시니어 담보 제1순위 노트에 대한 교환 제안을 시작했다고 발표했습니다. 자격이 있는 보유자는 기존 노트를 동일한 이자율과 만기의 새로운 노트로 교환할 수 있습니다. 교환 제안에는 조기 참여 프리미엄과 2024년 11월 PIK 이자 현금 지급이 포함됩니다.
조기 참여 마감일은 2025년 1월 7일이며, 최종 만료일은 2025년 1월 15일입니다. 교환은 발행된 노트의 최소 66.67% 참여를 요구합니다. 66.67% 이상을 대표하는 지원 보유자들이 이미 참여하기로 동의했습니다. 정산은 2025년 1월 22일로 예정되어 있으며, 슈퍼프라이오리티 노트의 마감과 일치합니다.
Azul a annoncé que sa filiale Azul Secured Finance LLP a lancé une offre d'échange pour toutes les Obligations Seniors Sécurisées à 11,930% First Out arrivant à échéance en 2028. Les détenteurs éligibles peuvent échanger les obligations existantes contre de nouvelles obligations avec le même taux d'intérêt et la même échéance. L'offre d'échange comprend une prime de participation anticipée et un paiement en espèces des intérêts PIK en novembre 2024.
La date limite de participation anticipée est fixée au 7 janvier 2025, avec une expiration finale le 15 janvier 2025. L'échange nécessite une participation minimale de 66,67% des obligations en circulation. Les détenteurs d'obligations soutenant représentant plus de 66,67% ont déjà accepté de participer. Le règlement est prévu pour le 22 janvier 2025, coïncidant avec la clôture des Notes Superpriority.
Azul hat bekannt gegeben, dass ihre Tochtergesellschaft Azul Secured Finance LLP ein Tauschangebot für alle ausstehenden 11,930% Senior Secured First Out Notes mit Fälligkeit 2028 gestartet hat. Berechtigte Inhaber können bestehende Anleihen gegen neue Anleihen mit dem gleichen Zinssatz und Laufzeit eintauschen. Das Tauschangebot beinhaltet eine frühzeitige Teilnahmeprämie und eine Barauszahlung der PIK-Zinsen im November 2024.
Die Frist für die frühzeitige Teilnahme endet am 7. Januar 2025, mit einem endgültigen Ablauf am 15. Januar 2025. Für den Austausch ist eine Mindestbeteiligung von 66,67% der ausstehenden Anleihen erforderlich. Unterstützende Anleiheinhaber, die über 66,67% repräsentieren, haben bereits ihre Teilnahme zugesagt. Die Abwicklung wird am 22. Januar 2025 erwartet, was mit dem Abschluss der Superpriority Notes übereinstimmt.
- Supporting noteholders representing over 66.67% have already committed to the exchange
- Exchange offer maintains same interest rate (11.930%) and maturity (2028) for new notes
- Early participants receive additional premium and PIK interest cash payment
- New notes will be subordinate to Superpriority Secured Obligations in terms of collateral claims
- Non-exchanged existing notes will become unsecured obligations
- Exchange offer requires minimum 66.67% participation to proceed
Insights
This exchange offer represents a significant debt restructuring initiative by Azul, offering to swap existing 11.930% Senior Secured First Out Notes due 2028 for new notes with the same coupon rate. The deal includes attractive incentives with an Early Exchange Premium of
The transaction requires minimum participation of
The exchange offer's legal framework is meticulously structured with multiple protective mechanisms. Key elements include the Transaction Support Agreement with major noteholders, detailed consent solicitation for indenture amendments and strict eligibility requirements under Securities Act regulations. The proposed amendments would significantly alter the existing notes' security structure by eliminating restrictive covenants and releasing collateral, effectively subordinating any non-exchanged notes.
The offering's compliance framework includes careful consideration of both U.S. securities laws and Brazilian regulatory requirements, with explicit restrictions on Brazilian market distribution and clear parameters for qualified institutional buyers under Rule 144A.
SÃO PAULO, Dec. 17, 2024 /PRNewswire/ -- Azul S.A., "Azul," (B3: AZUL4, NYSE: AZUL) ("Azul") today announced that its wholly-owned subsidiary Azul Secured Finance LLP (the "Issuer") has commenced an offer to Eligible Holders (as defined below) to exchange (such offer, the "Exchange Offer") any and all of the outstanding
Any capitalized terms used in this press release without definition have the respective meanings assigned to such terms in the Offering Memorandum.
The New Notes will be guaranteed by Azul, Azul Linhas Aéreas Brasileiras S.A., IntelAzul S.A., ATS Viagens e Turismo Ltda., Azul IP Cayman Holdco Ltd., Azul IP Cayman Ltd, Azul Conecta Ltda., Azul Investments LLP and Azul Secured Finance II LLP (together, the "Guarantors"). The New Notes will constitute First Priority Secured Obligations and will, pursuant to the Intercreditor Agreement, be secured on a "first out" basis by the Shared Collateral after payments with respect to the Superpriority Secured Obligations, as more fully described in the Offering Memorandum.
CUSIP/ISIN | Title of | Principal | Exchange | Consent Amount per | Early | November | Total Early | ||||||||
CUSIP: ISIN: |
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(1) | As of the date of the Offering Memorandum, the aggregate principal amount outstanding of the Existing Notes is |
(2) | The Issuer will issue New Notes in the minimum denomination of |
(3) | Eligible Holders who validly tender Existing Notes after the Early Participation Deadline (as defined below) but on or before the Expiration Deadline (as defined below) will not be eligible to receive the Early Exchange Premium for such Existing Notes validly tendered and not validly withdrawn. |
(4) | The "November 2024 PIK Interest Cash Payment" is a payment in |
Simultaneously with the Exchange Offer, the Issuer is conducting a solicitation (the "Solicitation") of consents (the "Consents") from Eligible Holders of the Existing Notes to effect certain proposed amendments (the "Proposed Amendments") to the indenture dated as of July 20, 2023, as supplemented from time to time, under which the Existing Notes were issued (the "Existing Notes Indenture"). The Proposed Amendments with respect to the Existing Notes Indenture would eliminate substantially all of the restrictive covenants, events of default and related provisions in a customary exit consent solicitation and release the collateral securing the Existing Notes, meaning that any Existing Notes that remain outstanding after the consummation of the Exchange Offer will be unsecured obligations of the Issuer and the guarantors thereof.
The valid tender of Existing Notes by an Eligible Holder pursuant to the Exchange Offer will be deemed to constitute the giving of a Consent by such Eligible Holder to the Proposed Amendments of the Existing Notes Indenture. Pursuant to the terms of the Existing Notes Indenture, the Proposed Amendments require the consent of holders of
Azul has entered into a Transaction Support Agreement (the "Transaction Support Agreement") dated October 27, 2024, among the Issuer, the Guarantors and an ad hoc group of holders of the Existing Notes, the Existing Second Out Notes and the Convertible Debentures (the "Supporting Noteholders"), and other supporting creditors. Subject to the terms and conditions set forth in the Transaction Support Agreement, the Supporting Noteholders have agreed to tender their Existing Notes in the Exchange Offer and deliver Consents to the Proposed Amendments. The Supporting Noteholders represent in excess of
The Exchange Offer and Solicitation may be amended, extended, terminated or withdrawn at any time prior to the Expiration Deadline (as defined below) and for any reason. The Issuer will announce any extension of the Expiration Deadline no later than 9:00 a.m.,
Important Dates and Times
Commencement of the | December 17, 2024. |
Withdrawal Deadline: | 5:00 p.m., |
Early Participation Deadline: | 5:00 p.m., |
Expiration Deadline: | 11:59 p.m., |
Early Settlement Date: | If the Issuer elects to have an Early Settlement Date, the Early |
Final Settlement Date: | Expected to be January 22, 2025 (the fourth business day following |
Upon the terms and subject to the conditions set forth in the Offering Memorandum, Eligible Holders that validly tender Existing Notes and deliver related Consents at or prior to 5:00 p.m.,
The "Total Early Exchange Consideration" for tenders of the Existing Notes that are accepted for exchange by the Issuer will consist of New Notes to be issued by the Issuer in the aggregate principal amount set forth in the above table, which includes the "Early Exchange Premium" and the "November 2024 PIK Interest Cash Payment," each as set forth in the above table.
Upon the terms and subject to the conditions set forth in the Offering Memorandum, Eligible Holders that validly tender Existing Notes and deliver related Consents after the Early Participation Deadline but at or prior to 11:59 p.m.,
Upon the terms and subject to the conditions of the Exchange Offer, the settlement date for the Exchange Offer will occur promptly after the Expiration Deadline (the "Final Settlement Date"). The settlement of the Exchange Offer will take place the same day as the closing for the Superpriority Notes.
If, at any time on or after the Early Participation Deadline, all conditions have been satisfied or waived by the Issuer, the Issuer may elect, in its sole discretion, to settle the Exchange Offer for Existing Notes validly tendered (and not validly withdrawn) prior to the Early Participation Deadline for the Exchange Offer at any time after the Early Participation Deadline and prior to the Expiration Deadline (the "Early Settlement Date" and, together with the Final Settlement Date, each a "Settlement Date").
If the Issuer elects to have an Early Settlement Date, the Early Settlement Date will be determined at the Issuer's option and announced by the Issuer. The Final Settlement Date is expected to be January 22, 2025 unless extended by the Issuer, which is the fourth business day following the Expiration Deadline.
The Issuer will not pay, on the relevant Settlement Date, any accrued and unpaid interest in cash with respect to the Existing Notes accepted for exchange by the Issuer. However, the interest commencement date for the New Notes issued pursuant to the Exchange Offer shall be November 28, 2024 (which is the start of the prevailing interest period for the Existing Notes on the relevant Settlement Date).
DTC participants are requested to transmit their acceptance of the Exchange Offer through ATOP on a per-beneficial owner basis, no Eligible Holder may tender less than all of its Existing Notes in the Exchange Offer, and the Existing Notes may be tendered and will be accepted for payment only in principal amounts equal to the minimum denomination of
The obligation of the Issuer to complete the Exchange Offer and the Solicitation is subject to certain conditions described in the Offering Memorandum (the "Conditions"), which include (i) the receipt of Existing Notes validly tendered (and not validly withdrawn) prior to the Expiration Deadline representing not less than
Pursuant to the terms of the Existing Notes Indenture, the Proposed Amendments require the written consent of holders of a
At any time after the Withdrawal Deadline and before the Final Settlement Date (or the Early Settlement Date, if the Issuer elects to have an Early Settlement Date), upon receipt of valid Consents sufficient to effect the Proposed Amendments with respect to Existing Notes, the Issuer and the Existing Notes Trustee under the Existing Notes Indenture may execute and deliver a supplemental indenture relating to the Proposed Amendments with respect to the Existing Notes Indenture immediately giving effect to such Proposed Amendments.
The Issuer will not receive any cash proceeds from the Exchange Offer or the issuance of the New Notes to be issued by the Issuer in the Exchange Offer. The Existing Notes acquired by the Issuer pursuant to the Exchange Offer will be cancelled and will not be reissued.
The offering, issuance and sale of the New Notes have not been and will not be registered under the
Holders who desire to obtain and complete an eligibility certification and access the Offering Memorandum should visit the website for this purpose at https://projects.sodali.com/azul. Morrow Sodali International LLC, trading as Sodali & Co ("Sodali & Co"), serves as the information agent and exchange agent (the "Information and Exchange Agent") in connection with the Exchange Offer and the Solicitation. Questions regarding the Exchange Offer and the Solicitation can be directed to Sodali & Co at its telephone numbers +1 203 658 9457 and +44 20 4513 6933 or by email at azul@investor.sodali.com.
Eligible Holders are informed that the expected CUSIP and ISIN numbers for the New Notes are set forth in the table below.
New Notes | |
CUSIP | Unrestricted: 05501WAD4 Regulation S: U0551YAE5 |
ISIN | Unrestricted: US05501WAD48 Regulation S: USU0551YAE50 |
This press release does not constitute an offer to buy or the solicitation of an offer to sell the Existing Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. This press release does not constitute an offer to sell or the solicitation of an offer to buy the New Notes, nor shall there be any sale of the New Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The New Notes will not be registered under the Securities Act or the securities laws of any state and may not be offered or sold in
The New Notes have not been and will not be issued or placed, distributed, offered or traded in the Brazilian capital markets. The issuance of the New Notes has not been nor will be registered with the CVM. Any public offering or distribution, as defined under Brazilian laws and regulations, of the New Notes in
None of the Issuer, the Guarantors, any of their respective directors or officers, the Information and Exchange Agent, or the Existing Notes Trustee, the New Notes Trustee, or in each case, any of their respective affiliates, makes any recommendation as to whether Eligible Holders should tender or refrain from tendering all or any portion of the Existing Notes in response to the Exchange Offer, or deliver Consents in response to the Solicitation. Eligible Holders will need to make their own decision as to whether to tender Existing Notes in the Exchange Offer and participate in the Solicitation and, if so, the principal amount of Existing Notes to tender.
This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the US federal securities laws. These forward-looking statements are based mainly on our current expectations and estimates of future events and trends that affect or may affect our business, financial condition, results of operations, cash flow, liquidity, prospects and the trading price of our securities (including the Existing Notes and the New Notes), including the potential impacts of the material transactions referred to in this press release. Although we believe that any forward-looking statements are based upon reasonable assumptions in light of information currently available to us, any such forward-looking statements are subject to many significant risks, uncertainties and assumptions, including those factors discussed under the heading "Risk Factors" in the company's annual report on Form 20-F for the year ended December 31, 2023 and any other cautionary statements which may be made or referred to in connection with any such forward-looking statements.
In this press release, the words "believe," "understand," "may," "will," "aim," "estimate," "continue," "anticipate," "seek," "intend," "expect," "should," "could," "forecast" and similar words are intended to identify forward-looking statements. You should not place undue reliance on such statements, which speak only as of the date they were made. Except as required by applicable law, we do not undertake any obligation to update publicly or to revise any forward-looking statements after the date of this press release because of new information, future events or other factors. Our independent public auditors have neither examined nor compiled the forward-looking statements and, accordingly, do not provide any assurance with respect to such statements. In light of the risks and uncertainties described above, the future events and circumstances discussed in this press release might not occur and are not guarantees of future performance. Because of these uncertainties, you should not make any investment decision based upon these forward-looking statements.
About Azul
Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in
For more information visit https://ri.voeazul.com.br/en. Information on Azul's website does not constitute a part of this press release.
Media Contact: azul@investor.sodali.com
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FAQ
What are the key dates for Azul's (AZUL) 2028 notes exchange offer?
What is the minimum participation requirement for AZUL's note exchange to proceed?
What benefits do early participants receive in AZUL's note exchange?
What happens to AZUL's existing notes that are not exchanged?
