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  • Joe Breitfeller

Avianca Completes 2020 Bond Exchange, One Step Closer to Closing on $250M Loan From United Airlines

Updated: Jan 11, 2020

On Friday, Avianca Holdings announced that they had successfully closed on their May 2020 bond exchange offer. This brings the airline one step closer to meeting financial and operational targets to receive a $250M loan from United Airlines and Kingsland Holdings.

Avianca Airbus A321 - Courtesy Avianca

On November 1st, 2019, Avianca Holdings S.A. (NYSE: AVH, BVC: PFAVH) announced the successful closing of an exchange offer for $550M in bonds that were due May 2020. With 88.1% participation, bondholders will receive secured notes with a maturity extension to 2023 and a 9% coupon, upon closing of an expected $250M loan. The bond exchange was a major milestone required by United Airlines and Kingsland Holdings in order to fund the loan. In Friday’s announcement, Avianca Holdings CEO, Adrian Neuhauser stated,

“We are very pleased with the successful closure of our Bond Exchange offer as it reaffirms our investors’ confidence in the plan which we have set forth for the company. We remain focused on completing the subsequent milestones to successfully conclude the reprofiling program as expeditiously as possible.”

Bogotá, Colombia based Avianca celebrated their 100th anniversary this year and the airline currently serves 76 destinations in 27 countries in the Americas and Europe. Avianca operates a fleet of 175 aircraft and earned $4.8B in 2018, transporting over $30M passengers. Last February, Avianca announced a corporate transformation plan called “Avianca 2021” focusing on operational improvements, fleet adjustments, profit optimization and non-strategic asset repositioning. On May 24th, 2019, control of the airline was assumed by Kingsland Holdings Limited. United’s SVP of Alliances, John Gebo, also stated in yesterday’s announcement,

“United congratulates Avianca Holdings on the successful closure of its bond exchange. As one of the most important steps in the Avianca 2021 plan, we are excited to see this achievement. We look forward to Avianca completing the final milestones and agreements with its remaining stakeholders so United and Kingsland can provide the previously announced loan to Avianca.”

Source: Avianca

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