Latam lifts term loan B to $1 billion, flexes to SOFR plus 950 bps

By Sara Rosenberg

New York, Oct. 11 – Latam Airlines upsized its five-year term loan B (B2/B+) to $1 billion from $750 million and increased pricing to SOFR plus 950 basis points from SOFR plus 775 bps, according to a market source.

Also, CSA was changed to 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate from 10 bps, and the original issue discount widened to 91.5 from talk in the range of 92 to 93, the source said.

In addition, the call protection was revised to non-callable for two years, then at par, from non-callable for one year, then at 101 in year two and par thereafter.

Furthermore, ticking fees were added to the term loan from pricing until the outside date of half the margin from days 46 to 90 and the full margin thereafter, and some changes were made to documentation, the source continued.

Another modification was that lenders now provide unfunded commitment to the term loan, the funding of which is conditioned upon emergence from Chapter 11 occurring on or prior to February 2023, versus lenders fund their term loan commitments at closing, not conditioned upon emergence from Chapter 11, previously.

The term loan still has a 0.5% floor and amortization of 1% per annum.

Goldman Sachs Bank USA, JPMorgan Chase Bank, Barclays, BNP Paribas Securities Corp. and Natixis are the lead arrangers on the deal.

Recommitments were scheduled to be due at 1:30 p.m. ET on Tuesday, the source added.

Proceeds will be used with $500 million of senior secured notes due 2027, downsized from $750 million with the term loan B upsizing, and $750 million of senior secured notes due 2029 to repay existing debtor-in-possession facilities in connection with the company’s emergence from bankruptcy and for general corporate purposes.

Latam Airlines is a Santiago, Chile-based airline. The company filed bankruptcy on May 25, 2020 under Chapter 11 case number 20-11254.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.