Norwegian proposes haircut for creditors

Norwegian’s creditors are set to take a significant haircut on their debts under a capital-raising exercise the carrier is planning under its restructuring processes. In a 19 February stock-exchange filing, the carrier says it intends to issue NKr1.88b ($221m) of perpetual subordinated convertible bonds and retained claims bonds to creditors. The perpetual bonds will bear an interest rate of six-month Norwegian Inter Bank Offered Rate plus 250 basis points in the first year of issuance, rising to 350bps in the second and third years, 500bps in years four and five, 700bps in years six and seven, and 950bps from year eight. DNB Bank has been appointed as global co-ordinator in respect of the issuance of the financial instruments in connection with the capital raise. Norwegian is also proposing that each creditors be given a debt claim with a nominal value equal to 4% of their unsecured claim. This debt claim on aggregate would, under “certain terms and conditions”, be convertible into shares representing approximately 25% of the airline’s share capital following the restructuring and the proposed capital raise.<br/>