Azul Airlines Launches Debt Securities Offering Amid Rating Update

Azul S.A. (B3: AZUL53, OTC: AZULQ), Brazil's leading airline, has recently revealed its plan to offer debt securities as part of its strategy to enhance the company’s financial stability. The announcement, made on January 28, 2026, is a crucial step for Azul as it seeks to secure exit financing related to its restructuring plan under Chapter 11 of the U.S. Bankruptcy Code.

Offering Details

Azul’s subsidiary, Azul Secured Finance LLP, a limited partnership based in Delaware, is launching a private offering aimed at generating senior secured notes that are due in 2031. This initiative is part of Azul’s broader effort to manage its financial obligations following a Chapter 11 bankruptcy filing. Specifically, the funds will be used to repay the outstanding balance of its debtor-in-possession (DIP) financing, and any remaining capital will support the implementation of a comprehensive restructuring plan designed to optimize the airline's capital structure and liquidity.

The senior secured notes will be guaranteed by Azul and various subsidiaries, such as Azul Linhas Aéreas Brasileiras S.A. and Azul Cargo, ensuring a solid backing for the securities. The plan also includes utilizing a varied collateral package, which encompasses receivables from specific segments of the company, including its loyalty program, travel package business, and cargo service, as well as certain intellectual properties and shares in subsidiaries.

Azul cannot guarantee the complete success of the offering, emphasizing that final terms will depend on market conditions. Notably, the notes will not be registered with Brazilian securities authorities, limiting their sale to specific circumstances under Brazilian law.

Credit Rating Updates

In conjunction with the offering, Azul has received updates on its credit ratings. Moody's has assigned a Corporate Family Rating of B2 for Azul and its exit financing securities, while Fitch Ratings has given an expected B- rating, both with stable outlooks. These ratings reflect the agency's analysis of Azul’s steps in implementing its restructuring plan under Chapter 11.

According to both rating agencies, these ratings were influenced by the company's proactive efforts and adherence to its operational guidelines during the restructuring process. As Azul continues to prioritize its restructuring initiatives, the airline remains committed to transparent communication with stakeholders, assuring them of consistent updates regarding its progress.

About Azul

Founded in 2008, Azul S.A. stands as the largest airline in Brazil by the number of cities served, operating around 800 daily flights to over 137 destinations. With more than 200 aircraft in its fleet and a workforce of approximately 15,000 crewmembers, Azul has established itself as a key player in the airline industry. The company has been recognized for its punctuality and customer service, earning accolades such as the title of the world's best airline from TripAdvisor in 2020.

Looking ahead, Azul aims to navigate the challenges posed by its restructuring while focusing on maintaining operational efficiency and improving service delivery. The company's commitment to overcoming current obstacles positions it favorably for future growth.

In summary, Azul S.A.’s announcement regarding the debt securities offering and credit rating updates reflects its strategic direction in addressing immediate financial challenges and building a resilient foundation for the future.