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5 May 20214 minute read

DLA Piper advises Avation Plc on complex five year bond extension

DLA Piper has advised Avation PLC (LSE: AVAP) (Avation), the London-listed commercial passenger aircraft leasing company, on its discussions with noteholders, their lawyers and financial advisers to achieve a successful maturity extension on its USD350 million 6.5% senior notes by more than five years from May 2021 to October 2026.

The successful deal comes on the back of negotiations with a sophisticated and (primarily) US-based group of noteholders representing 76% of the notes (An Ad Hoc Group), its lawyers and financial advisors. The agreement reached includes extending the notes' maturity to 31 October 2026; paying either an additional 1.75% cash or 2.5% in-kind interest, at the company's option; a fee of up to 75 basis points for early consents and 25 basis points for late consents; and issuing to holders a total of six million warrants expiring in October 2026 for ordinary shares priced at 114.5 pence per share. Whilst the agreement was reached with only the Ad Hoc Group, the deal was unanimously approved by noteholders in a tightly coordinated consent solicitation process. The restructuring has allowed Aviation to restore its Fitch rating from RD to CCC. The Notes are cleared through the Depository Trust Company and have been listed on the Singapore Stock Exchange.

Avation PLC is an aircraft leasing company, headquartered in Singapore which owns and manages a fleet of commercial passenger aircraft leased to airlines around the world.

The DLA Piper team was led by Singapore-based Corporate partner Philip Lee with support from senior associate, Andhari Sidharta, Mei Sum Chan and Teerin Vanikieti as well as support from London-based high yield partner, Tony Lopez, and Restructuring specialist partner David Ampaw.

Partner Philip Lee, commented: “We are absolutely delighted to have advised Avation on this high yield notes restructuring, which will provide high financial flexibility to support the continued development of the business through and post the COVID-19 pandemic.”

This transaction builds on DLA Piper’s existing experience advising clients on international debt restructurings involving a complex web of regulations and issues, including financial, credit and equity considerations, securities laws, stock exchange rules, clearing house procedures and finance and corporate law issues as well as general debtor and creditor issues.