Brazil’s first bond deal secured by aircraft spare parts; partners Andrew Jánszky and Tobias Stirnberg in São Paulo lead Milbank deal team
In a historic and unique capital markets transaction in Latin America, Milbank, Tweed, Hadley & McCloy LLP advised Brazilian air carrier Gol Linhas Aéreas Inteligentes S.A. and subsidiaries in the private exchange of notes issued by GOL Finance and Gol LuxCo S.A. for new notes offered by Gol LuxCo S.A. resulting in a US$101.2 million reduction of its total debt.
It is the first bond deal in Brazil – and one of only a few worldwide – secured by a first priority security interest in equipment spare parts of the guarantor.
The Exchange Offers allowed the company’s unsecured noteholders to exchange old notes for newly issued secured notes. This successful completion of the Exchange Offers will support GOL’s efforts to emerge from the current political and economic crisis in the best competitive position.
The Milbank deal team was led by New York- and São Paulo-based partner Andrew Jánszky, head of the firm’s Latin America practice group, Tobias Stirnberg, a founding partner of Milbank’s São Paulo office, and associates Fabiana Sakai and Felipe Camara.
Mr. Jánszky said: “We are pleased to advise on this first-of-its-kind capital markets transaction for a Brazilian issuer, which highlights market faith in the country’s second-largest airline.”
Milbank represented all three GOL entities in the exchange offer for all outstanding GOL Finance 7.50% senior notes due 2017 for cash and GOL LuxCo’s newly issued 9.50% secured amortizing notes due 2018; all of Finance’s 9.250% senior notes due 2020, LuxCo’s 8.875% senior notes due 2022 and LuxCo’s 10.750% senior notes due 2023 for cash and LuxCo’s new 9.50% secured notes due 2022; and Finance’s 8.75% perpetual notes for newly issued LuxCo’s 9.50% secured notes due 2028.
The new notes are guaranteed by Gol Linhas Aéreas Inteligentesand secured by a first priority security interest in all spare parts owned by GOL. The notes are structurally senior to all of GOL’s existing and future unsecured indebtedness and senior to any future subordinated indebtedness that GOL may incur.
About Milbank
Milbank, Tweed, Hadley & McCloy LLP is a leading international law firm that provides innovative legal services to clients around the world. Founded in New York 150 years ago, Milbank has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo and Washington, DC.
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