Cadwalader Advises Kingsland on $250 Million Mandatory Convertible Loan Facility to Avianca Holdings

December 12, 2019

Cadwalader is advising Kingsland Holdings Limited (“Kingsland”) on its previously-disclosed $250 million mandatorily convertible loan facility (the “Convertible Loans”), along with United Airlines Inc. (“United”), provided to Avianca Holdings S.A. (“Avianca”). The Convertible Loans are part of Avianca’s successful completion of a comprehensive liquidity program that involved reprofiling over $4.5 billion of lease and debt obligations.

Avianca successfully reached broad agreement with its creditors last week, allowing it to comply with key conditions precedent for funding of the Convertible Loans by United and Kingsland. In turn, the funding of the Convertible Loans allowed Avianca’s agreements with its creditors to go effective, reprofiling substantially all of its loans and aircraft lease obligations. In addition, funding of the Convertible Loans triggers the automatic exchange of approximately $484 million aggregate principal amount of Avianca’s current bonds due May 2020 for secured bonds due May 2023.

Avianca is the commercial brand for the collection of passenger airlines and cargo airlines under the umbrella company Avianca Holdings S.A. Avianca has been flying uninterrupted for 100 years. With a fleet of 175 aircraft, Avianca serves 76 destinations in 27 countries within the Americas and Europe. With more than 21,000 employees, the Company earned $4.8 billion in 2018 and transported 30.5 million passengers. On February 22, 2019, Avianca Holdings, S.A. announced its corporate transformation plan consisting of four key pillars: 1) the improvement of operational indicators, 2) fleet adjustments, 3) the optimization of operational profitability and 4) repositioning of non-strategic assets. Last May 24th, control of the Company was assumed by Kingsland, an independent third party of United Airlines.

The Cadwalader team was led by Corporate co-chair Richard Brand, Corporate partner Andy Alin and Finance partner Kurt Oosterhouse and included Finance associates Evan Carter, Ryan Leverone, and David Rusk; Corporate special counsels Joanna Valentine and Nick Ramphal and associates Tyler Carson, Christopher Smith, and Daniel Shiner; and Antitrust partner Joel Mitnick.

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