Brazilian airline’s bond deal first

Author: Edward Price | Published: 13 Jul 2016

Brazilian air carrier GOL Linhas Aéreas Inteligentes, and subsidiaries, have negotiated the private exchange of notes issued by GOL Finance and Gol LuxCo for new notes offered by Gol LuxCo.  The bond deal represents the first in Brazil secured by a first priority security interest in the equipment spare parts of the guarantor. 

Milbank Tweed, Hadley & McCloy advised GOL Linhas Aéreas Inteligentes and its subsidiaries. The new notes are guaranteed by Gol Linhas and are secured by a first priority security interest in all spare parts owned by GOL. They are also structurally senior to all of GOL’s existing and future unsecured indebtedness and senior to any future subordinated indebtedness that GOL may incur. 

According to Andrew Jánszky, partner at Milbank Tweed Hadley & McCloy, the deal was a successful exchange offering particularly given the very difficult environment facing both the company and the country.