Year: 2022

Winner: Tocumen Airport

The aviation industry was battered by the travel restrictions imposed during the coronavirus
pandemic, with airlines losing tens of billions of dollars as their planes were grounded. It sent
shockwaves across the rest of industry. From that situation emerged one of the biggest
refinancing deals in Latin America last year.
As the industry crisis unfolded in 2020, AITSA, which manages the Tocumen International
Airport in Panama, saw an opportunity to alleviate financial stress by refinancing $1.4 billion
of high yield bonds.
Tocumen’s passenger traffic plunged 73% in 2020 and 45% in 2021 compared with 2019
levels, while operating income tumbled 67% and 50% respectively.
But the company’s debt profile and debt-servicing obligations put pressure on its credit rating
and the outlook for the industry’s was unclear.
“There was enormous uncertainty and the projections for the industry forecast a recovery
toward the end of 2024,” says its CFO Julieta Cordoba.
However, the two-part refinancing that emerged helped put those concerns to rest. With the
sale of $1.85 billion in new 20-year and 40-year notes, the company was able to take all the
high-yield debt out of circulation, reducing its debt serving costs.
In addition, part of the proceeds of the new bonds would be used to support airport operations
and administration expenditure, aiding the recovery from the pandemic.
The deal even improved AITSA’s credit rating. S&P and Moody’s raised the company from
junk to the second-lowest investment grade.
Investor demand was intense. The sale was oversubscribed within 45 minutes of its
announcement, with total demand reaching $7.4 billion. AITSA achieved a 4% coupon for the
$555 million in 2041 notes and 5.125% for the $1.3 billion bond — both 50 basis points
below initial price talk.
Also in its favor, Tocumen was a fast-growing travel hub in Latin America prior to the
pandemic and the company enjoyed strong EBIT margins and leverage ratios similar to its
regional and international peers. It also had a new terminal and saw passenger traffic recover
quickly when travel restrictions were lifted.
“The transaction was structured in such a way that it strengthened the airport’s liquidity to
make it even more attractive to the market,” Cordoba says.

Bank of America and Citigroup were joint bookrunners and Banco General was joint lead

Aeropuerto Internacional de Tocumen

Issuer: (International) Shearman & Sterling, (Panama) Icaza, González Ruiz & Alemán
Buyers: (International) Milbank, (Panama) Alemán, Cordero, Galindo & Lee

Trustee: Citi, Singapore Agent: Allen & Gledhill, Guarantee Trustee: Scotia Panama Trust
Company, Local Stock Exchange: BG Investment Co

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