Clifford Chance

Clifford Chance advises on US$500 million high yield bond offering and US$300 million exchange settlement tender offer for LATAM Airlines Group S.A.

Clifford Chance has advised LATAM Airlines Group S.A. in its inaugural issuance of high yield bonds in a Rule 144A / Regulation S offering of US$500,000,000 7.25% Senior Notes due 2020 and a related exchange settlement tender offer for US$300,000,000 9.50% Senior Guaranteed Notes due 2020 of TAM Capital 2 Inc., which became a part of LATAM Airlines Group in connection with the merger of LAN Airlines and TAM Airlines in 2012. The transactions closed on June 9, 2015.

A portion of the new Senior Notes were exchanged for legacy notes tendered in the exchange settlement tender offer, with the benefit to LATAM that certain tender premiums and costs will be amortized over the life of the new Senior Notes in accordance with IFRS. The balance of the offering was settled for cash with the proceeds being used to redeem any remaining legacy notes and for general corporate purposes.

The New York-based Clifford Chance team advising on this transaction was led by partner Gary Brooks and included significant involvement from partners Emily DiStefano, Per Chilstrom and Avrohom Gelber, as well as associates Vanessa Browder, Clark Spencer and Ken Lee.

The offering follows closely on LATAM's inaugural issuance of Enhanced Equipment Trust Certificates, on which Clifford Chance also advised. That transaction generated proceeds in excess of US$1 billion and was the first-ever EETC transaction for a Latin American airline.