Clifford Chance

Clifford Chance advises Nordic Aviation Capital on its $6bn debt restructuring using a solvent scheme of arrangement

International law firm Clifford Chance has advised Nordic Aviation Capital (NAC), the world’s largest regional aircraft lessor, on the successful restructuring of approximately $6bn of its secured and unsecured debt. Whilst NAC entered the current global crisis in a strong liquidity position, the resulting fall-out in the aviation sector has caused significant distress. This restructuring aims to provide NAC with a stable platform whilst the aviation market recovers by deferring certain payments of principal and interest. It also waives a number of covenants that likely would otherwise have been breached as a result of the current market distress. These terms were ultimately overwhelmingly supported by NAC's financial creditors.

This restructuring was implemented using a solvent Irish scheme of arrangement, together with certain bilateral arrangements, and contained a number of innovative aspects designed by Clifford Chance. In particular, the scheme relied on the existence of a common guarantor across the affected financings in order to act as a single point of entry, with relief under the scheme terms then extended to each primary NAC debtor under the relevant financings. This approach allowed a single scheme to be implemented across 89 different facilities governed by a mixture of English, New York and German law and reflecting a variety of different financing structures.

The Clifford Chance team was led by partners William Glaister (London, Asset Finance) and Philip Hertz (London, Restructuring), with support from senior associates Tim Bennett, James McNicol and Richard Evans. Jennifer DeMarco (New York, Restructuring), Michelle McGreal (New York, Restructuring) and Zarrar Sehgal (New York, Asset Finance) advised on U.S. aspects of the restructuring, including seeking recognition of the scheme under Chapter 15 of the US Bankruptcy Code.