Brazil's Gol asks bondholders to exchange $780m in debt

Gol Linhas Aereas is offering to exchange $780m of dollar-denominated notes for new securities maturing over a decade, as the Brazilian airline struggles to reshape its finances amid a deepening recession in the domestic market. Bondholders of five different tranches of debt, one of them maturing as early as next year, are being asked to accept new securities due in 2018, 2022 and 2028, the company said in a regulatory filing. The new notes will be senior to all of Gol’s existing and future unsecured debt. The haircut for bondholders, who have until June 1 to accept the offer, will range from 30 to 70%, CFO Edmar Lopes said. In offering the exchange, Gol cited Brazil’s political instability and contracting economy, along with a “sharp devaluation” in the country’s currency against the US dollar last year that led to a decline in travel. Airlines have been particularly hurt by weak demand among business passengers, who typically generate the most-profitable fares. “We are offering a coupon that makes sense for current bondholders,” Lopes said. “We understand this is a good offer, considering market conditions. This is what is possible within the company’s cash flow, looking at our balance sheet and considering how we aim to deleverage the company for the upcoming years.”<br/>