Avianca Group Announces Pricing of US$650 million aggregate principal amount of its new 10.250% Senior Secured Notes due 2032

Avianca Group International Limited has announced the pricing of a significant fundraising initiative through its subsidiary, Avianca Midco 2 PLC. On June 24, 2026, the company priced an offering of U.S.$650,000,000 aggregate principal amount of new 10.250% Senior Secured Notes due 2032. This offering is expected to close on July 7, 2026, and aims to bolster the company’s financial position by refinancing existing debt and supporting general corporate needs.

The newly issued notes carry a coupon rate of 10.250%, which is positioned above the market rates for similar securities, reflecting the company's strategy to manage its capital structure effectively. The proceeds from this offering will be utilized to redeem all outstanding 9.000% Senior Secured Notes due 2028 and the 9.000% Tranche A-1 Senior Notes due 2028. This move is part of Avianca's broader strategy to extend the maturity of its indebtedness and optimize its debt profile, allowing for improved liquidity and financial flexibility.

Avianca Group operates in the highly competitive aviation sector, which has faced significant challenges in recent years, including fluctuating fuel prices, changing consumer demand, and the ongoing impacts of global economic conditions. The issuance of these senior secured notes is indicative of the company’s efforts to navigate these challenges while positioning itself for future growth. By refinancing higher-cost debt, Avianca aims to reduce interest expenses and enhance its overall financial stability.

The offering is structured to appeal to qualified institutional buyers, leveraging exemptions from registration under the U.S. Securities Act. This approach underscores the company's focus on attracting sophisticated investors who can support its long-term strategic objectives. The decision to issue senior secured notes rather than equity reflects a preference for debt financing in a market environment where interest rates remain relatively favorable.

Overall, the successful pricing of these notes highlights the ongoing demand for high-yield debt in the current market. As companies like Avianca seek to optimize their capital structures amid economic uncertainties, the ability to access capital markets remains crucial. This transaction may serve as a benchmark for other firms in the sector looking to refinance existing obligations or fund growth initiatives, illustrating the resilience and adaptability of the aviation industry in a challenging economic landscape.