The Mexican company Grupo Aeroméxico SAB is turning to the international debt market with the aim of raising up to 1,100 million dollars that will be used to refinance existing payables. To achieve this, Aeroméxico is offering 500 million dollars in five-year bonds and 610 million dollars in seven-year notes in a transaction whose price is expected to be set on Monday, according to a source close to the matter.
The bonds rose to 102.95 cents on the dollar on Monday, October 28. Since emerging from bankruptcy protection more than two years ago, the airline has increased its earnings, allowing it to conduct an initial public offering in the United States early this year. Moody’s Ratings upgraded Aeroméxico's rating to Ba3 from B2 and changed its outlook to positive, with the same rating assigned to the new notes.
Sandra Beltrán, senior analyst at Moody’s, stated: “Given its strong operational performance that has exceeded our expectations since 2022, Aeroméxico will manage the additional debt with debt protection metrics that are aligned with the Ba3 rating category.” S&P Global Ratings also upgraded Aeroméxico's rating from B to B+, describing the proposed refinancing plans as "prudent."
Apollo Global Management Inc. and other investors are expected to raise up to 500 million dollars in an initial public offering in the United States. The 2029 notes will have a yield of 8.375% and the 2031 bonds around 8.75%. Barclays is the sole underwriter of the deal, and the funds raised will be used to refinance secured bonds maturing in 2027 for a total of 663 million dollars, according to the company's statement.
