Virgin Australia adds D tranche to its EEN

Dino D'Amore
By Dino D'Amore October 11, 2013 12:47

Virgin Australia adds D tranche to its EEN

As indicated in the original prospectus for its US$732.623 million Enhanced Equipment Note (EEN) issuance, Virgin Australia has issued an extra US$64.6 million D tranche. Although this was expected due to the prospectus, the speed of the issuance has surprised the market, which is testament to the strong investor demand for the paper as well as the nimbleness and quick reaction time of the Virgin Atlantic team and the structuring bank, Goldman Sachs.

The three-tranche transaction was issued on Sunday night/Monday morning to take advantage of global time zones from Australia to North America, while the strong uptake convinced Virgin Atlantic to consider issuing the D notes on Wednesday, when a new prospectus had been prepared along with an increased depositary envelope, rating agency approvals, as well as finance lease adjustments, among others. There was strong demand in the D notes from investors who were already large players in the original offering on Monday.

The D tranche was rated B by Fitch and priced at 8.5% with an approximate loan to value ratio of 93% – the highest LTV ever achieved in such a structure.

The rating reflects the weak collateral coverage for the D tranche, says Fitch, which “combined with the absence of a liquidity facility and subordinated position to the C-Tranche (rated ‘B+’) supports the one notch rating differential from the C-Tranche”.

I must say it was interesting to see so many of you on the ball yesterday with regard to Etihad. I had more messages on the subject of Etihad/Jet Airways FDI than on any other subject thus far in 2013. It seems the bulk of the aviation industry thinks the timing of the Etihad announcement that it is to purchase Air India’s 777s may have been guided by the Etihad/Jet Airways regulatory approval earlier this week. I can confirm that we here have not received any confirmation that the two matters were in any way related.

Dino D'Amore
By Dino D'Amore October 11, 2013 12:47
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Feditorial-comment%2Fvirgin-australia-adds-d-tranche-to-its-een%2F"> registered </a> users can comment.