Budget airline AirAsia has secured $443m in private funding from a group of lenders including Ares Management Corp and Indies Capital Partners, to help refurbish planes that were grounded during the pandemic, according to a report by Bloomberg.
The report cites unnamed sources familiar with the deal as revealing that the financing comes in two tranches – a $200m tranche from the private credit firms for refurbishment, and a $243m tranche from aircraft lessors to refinance lease liabilities.
The financing is structured as privately-placed bonds linked to AirAsia’s revenue, secured by the future sale of airline tickets on its key routes, according to the sources.
AirAsia is being advised by Evercore, A&O Shearman and Milbank LLP.
The private credit tranche of AirAsia’s securitised deal carries an 11% annual coupon with a four-year term, while the lessor tranche offers a 7% annual return with a two-year maturity. The deal has been finalised but is yet to be funded.
