Gol could print between $350m and $550m in fresh seven-year debt to fund a liability management exercise and increase the portfolio of its debt profile, the Brazilian airline’s CFO told LatinFinance on Monday.
«We want to take advantage of market conditions, increase the profile of our debt portfolio and advance our deleveraging story that we expect to carry out over the next 12-to-18 months,» Richard Lark said.
Gol will time the trade over a non-call four structure and use a portion of proceeds to buy back the $276.7m it has in outstanding 8.875% 2022 bonds. The airline is offering 2022 noteholders $1,065 for every $1,000 exchanged in principal by December 6.
Earlier this month, Fitch Ratings upgraded Gol to B from CCC due to the company’s efforts to restructure. Lark said the parallel exercise, of a tender and new bond issue, was designed to build on momentum from the upgrade and restructuring as well as get out in front of Brazil’s 2018 election year.
«We just completed an 18-month long restructuring process,» Lark added. «In Brazil, in a pre-election year, we try to avoid the May-to-September period.» Gol has also been monitoring market conditions for at least two months now and based on bondholder feedback, Lark is hopeful of strong investor participation throughout the roadshow.
Should the company increase the issue size above $350m, Lark said proceeds could repay four of Gol’s outstanding callable bonds.
Fellow airline Azul’s $400m 2025 trade, printed in October, is the earliest possible comparable for any new Gol paper. Lark said these bonds were spotted around 6% in Monday’s secondary market.
Bank of America Merrill Lynch, BCP Securities, Credit Suisse and Morgan Stanley are coordinating the bond sale, DCM bankers confirmed.
The quartet will coordinate investor meetings in London, before visiting accounts in Geneva, Zurich and Santiago on Thursday and New York on Friday. Next week, the bookrunners will tap accounts in Los Angeles and Singapore on December 4 and conclude meetings in Boston on December 5…
