(Bloomberg) -- Grupo Aeromexico SAB sold $1.1 billion of bonds via international markets Monday that the air carrier will use to refinance debt due in the coming years.
Aeromexico issued $500 million of five-year notes and $610 million of seven-year securities, according to data compiled by Bloomberg. Proceeds will be used in part to pay down $663 million in senior secured notes due in 2027, the company said in a statement.
The 2029 notes priced to yield 8.25%, while the 2031 bonds yielded 8.625%, tighter than initial guidance. Barclays was the sole bookrunner for the deal.
The airline has increased its profits since emerging from bankruptcy protection in 2022, enabling it to file for a US initial public offering earlier this year.
Moody’s Ratings raised its credit grade on Aeromexico to Ba3 from B2 on Monday after the bond offer was announced, placing the same rating on the new notes, and changed its outlook to positive from stable.
“Given its strong operating performance that has been exceeding our expectations since 2022, Aeromexico will manage the additional indebtedness,” wrote Sandra Beltran, a senior analyst at Moody’s.
Stronger credit metrics and profitability margins also led S&P Global Ratings to upgrade Aeromexico to B+ from B on Oct. 22. The firm called the proposed refinancing plans “prudent” in a note on Monday.
Apollo Global Management Inc., which helped keep the airline afloat when it filed for Chapter 11 protection in 2020, and other investors are planning to raise as much as $500 million in a US initial public offering, Bloomberg reported in June.
--With assistance from Boris Korby.
(Adds final pricing details beginning in first paragraph)
©2024 Bloomberg L.P.
