Citadel, United among lenders in $2b Avianca funding

The hedge fund Citadel Advisors, United Airlines and a Salvadoran air mogul are among investors offering loans as part of Latin American airline Avianca Holdings SA’s $2b bankruptcy financing plan, according to court documents. The companies, which were stakeholders in the carrier before it filed for Chapter 11 protection in May, would help provide about $722m in loans. Together with a separate tranche of roughly $1.3b of debt, Avianca said it has commitments for $2b in debtor-in-possession funding. “Securing these financing commitments is another concrete step forward in our Chapter 11 reorganization process,” CEO Anko van der Werff said. The plan needs approval from the US Bankruptcy Court for the Southern District of New York. The debt being offered by an affiliate of Citadel -- the famed hedge fund founded by billionaire Ken Griffin -- United, and Salvadoran Roberto Kriete’s Kingsland Holdings would be eligible to roll over into common shares when Avianca emerges from the Chapter 11 reorganization, according to court filings. Meanwhile, the loans will bear an interest rate of 14.5%, according to filings. Creditors holding the 2023 notes will have $220m of the debt rolled up into new loans. They have agreed to lend an additional $290m, according to a company statement.<br/>