Azul S.A. Announces Completion of Exchange Offer for 2028 First Out Notes

On January 22, 2025, Azul S.A., the prominent airline based in Brazil, disclosed the expiration and final outcomes of its previously announced exchange offer concerning its existing 2028 Senior Secured First Out Notes. This initiative, conducted by its wholly-owned subsidiary Azul Secured Finance LLP, aimed to allow eligible holders to exchange their current notes for newly issued notes while also seeking consent for amendments to the terms of the existing indenture.

Key Details of the Exchange Offer

The exchange offer was specifically focused on the outstanding 11.930% Senior Secured First Out Notes that are due in 2028. The offer drew significant interest, culminating in an impressive 99.69% of the total outstanding principal amount of these notes being tendered for exchange before the expiration deadline on January 21, 2025. This level of participation not only highlights the strong investor confidence in Azul's financial strategies but also ensured that the minimum conditions for the exchange were met.

The process was guided by the terms outlined in the confidential offering memorandum distributed on December 17, 2024, which provided eligible holders with all necessary information to make informed decisions regarding their participation. Underlining the strategic nature of this exchange, the company indicated that the move was part of a broader effort to optimize its debt structure.

Conditions and Expectations

The completion of the exchange offer was contingent on several factors, which included a requirement that at least 66.67% of existing notes were validly tendered. With the successful fulfillment of this condition, Azul is now positioned to proceed with the settlement process, which is expected to be finalized soon. The settlement date will not only mark the acceptance of the exchanged notes but will also set the interest commencement date for the new notes, officially starting on November 28, 2024.

In alignment with the changes, Azul also received sufficient consents from existing noteholders to carry out the proposed amendments aimed at the existing notes. This encompasses executing a supplemental indenture that will formalize these modifications, ensuring that all legal and operational requirements are properly addressed.

Forward-Looking Vision

Azul S.A. remains focused on maintaining its position as the largest airline in Brazil, known for its extensive flight network of over 1,000 daily flights to more than 160 destinations. The strategic move to optimize its financial obligations through this exchange initiative reinforces its stability in an ever-evolving market landscape, poised for future growth and sustainability.

This transaction is a continuation of Azul's commitment to enhancing its operational efficiencies while prioritizing the interests of its investors and stakeholders throughout the journey. By solidifying its financial standing and extending its offerings, Azul is expected to navigate the competitive aviation sector adeptly, ensuring a resilient business model that can respond to market dynamics.

Stay tuned for further announcements as Azul S.A. reveals the official settlement date for this exchange and subsequent financial strategies aimed at fostering growth and profitability in the upcoming years.