Winner: Aeropuertos Argentina 2000
The COVID-19 pandemic created unprecedented disruption in Latin America’s travel sector, with major airlines declaring bankruptcy as countries locked down and flights stopped.
Argentina’s government instituted one of the region’s most sweeping lockdowns, completely shutting the country for several weeks. Traffic at the country’s airports was down 91.1 percent in April compared to the same month the previous year, according to government data.
Aeropuertos Argentina 2000 (AA2000), the largest private airport operator in the world, was quick to understand what was happening as debt payments loomed and passengers disappeared.
The company decided on a creative approach to restructure $400 million in bonds that had been issued in by inviting investors swap existing debt for new paper, an operation that earned AA2000 our corporate liability management award for the year.
The operation, which secured the support of approximately 88% of AA2000’s bondholders, issued $306 mln in new notes in May 2020. The plan included a new interest rate of 9.375% compared to the original 6.875% for the deferral. It also came with a payment-in-kind mechanism that meant paying interest accrued during deferral with additional bonds instead of cash.
The company successfully delayed four scheduled payments from May 2020 to February 2021. Payments are scheduled to begin again in May 2021.
“We acted early in the pandemic. We prepared for the possibility of going for a long time without passengers and we are confident that what we did will allow us to face 2021 on solid footing,” said Jorge Arruda, head of finance and M&A at Corporación América Airports, AA2000’s parent company.
Juan Vico, AA2000 CFO, said the operation helped the company maintain its creditworthiness as it worked through “an unprecedented moment of trying to preserve cash flow and keep our employees without passengers.”
Airports remained open for emergency flights, including humanitarian repatriation flights, which put more pressure on the company. Recovery is happening, but it is slow. Airport traffic was off by 68 percent in November, the most recent statistic.
Corporación América has a 75.7% share in AA2000, with Argentina’s government holding 15%, Italy’s Gruppo SEA with 8.5% and Riva, a construction company, 0.85%. – LF
SPONSOR: Aeropuertos Argentina 2000
BANKS: Citi, Santander, UBS
LAW FIRMS: Bomchil; Greenberg Traurig; Marval O’Farrell Mairal; Mayer Brown
SUPPORT: Global Bondholder Services Corp; Price Waterhouse & Co
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