Azorra Finance has closed its $550 million 7.25% senior unsecured notes due 2031, guaranteed by its parent Azorra Aviation Holdings.
The offering was upsized from the initially disclosed $500 million in response to strong investor demand.
This marks Azorra’s second senior unsecured notes offering, with it issuing a $550 million 7.750% notes due 2030 in October last year.
The 2031 senior notes have been rated BB, B1, and BB by Fitch, Moody’s, and S&P, respectively.
Azorra said the proceeds will be used to repay existing debt and for general corporate purposes, which may include the financing the acquisition of new aircraft deliveries.
Citigroup and Societe Generale acted as active bookrunners. Joint bookrunning managers were Deutsche Bank Securities, MUFG, RBC Capital Markets, BNP Paribas, BofA Securities, Natixis, PNC Capital Markets, and SMBC Nikko.
S&P had said in its report it expects the proceeds to be used to repay outstanding drawings on its revolving credit facility and to finance aircraft acquisitions. This would include its recently disclosed acquisition of 49 Embraer E-Jets and two GE CF-34 engines from Dubai Aerospace Enterprise (DAE) in May.
“We view positively the increase in unsecured debt as a portion of funding,” said S&P. “Having fewer unencumbered assets aids financial flexibility, since lessors with a sizable, unencumbered asset base can use the assets as collateral for secured borrowings if access to unsecured borrowing becomes unavailable.”
“This transaction marks another important milestone in Azorra’s continued growth,” said Azorra CEO and founder John Evans. “The strong demand for our second unsecured notes issuance, coupled with upgrades and affirmations from the rating agencies, is a testament to our disciplined strategy, the resilience of our business model, and the market’s confidence in our long-term vision.”
The company’s outlook was revised from stable to positive in May by Fitch. The agency also affirmed the company’s long-term issuer default rating at BB-.
Azorra SVP finance Claudia Ziemer commented: “This offering allows us to efficiently refinance existing debt and positions us well to capitalise on upcoming aircraft deliveries and market opportunities and the upsize reflects the market’s confidence in our financial strength and our strategic direction.”
In January, Azorra had finalised a $190 million financing agreement with Brazilian Development Bank (BNDES) to fund up to eight E2 jets.
During Embraer's press conference at the Paris Air Show, the Brazilian manufacturer said that South African regional airline Airlink had selected 10 new E195-E2 jets, with the aircraft to be leased from Azorra. Embraer said the aircraft will allow the company to further grow across Africa. Azorra CEO and founder John Evans confirmed that first delivery would commence either late September or early October.