Avianca seeks OK of $1.6 billion of DIP-to-exit financing commitments

By Sarah Lizee

Olympia, Wash., July 23 – Avianca Holdings SA is seeking court approval to enter into DIP-to-exit facility commitment letters, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

The first commitment, from a group of lenders that includes many of its existing tranche A DIP lenders, is for $1.05 billion in new tranche A-1 DIP/exit loans. The second commitment, from a group of new-money lenders, if for $550 million in new tranche A-2 DIP/exit loans.

The two commitments have slightly different commercial terms, but both will be used to replace the existing tranche A and both will convert, at the debtors’ option, to a seven-year exit financing at emergence.

The commitment premiums were not disclosed in the motion.

A hearing is scheduled for July 26.

Avianca is a Bogota, Colombia-based airline holding company that filed bankruptcy on May 10, 2020. The Chapter 11 case number is 20-11133.

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