Budget carrier AirAsia gets $443m private credit deal

Budget carrier AirAsia Bhd has secured a $443m dual-tranche private financing to use partly for refurbishing planes grounded during the pandemic, according to people familiar with the matter. Private credit funds Ares Management Corp. and Indies Capital Partners Pte. Ltd. provided a $200m tranche for the refurbishment of the aircraft to get them back in the air, said the people who asked not to be identified discussing private matters. Aircraft lessors provided the other $243m portion to refinance lease liabilities. AirAsia’s structured deal is another instance of the growing popularity of private credit in Asia that is fast becoming a serious rival to mainstream lending by offering higher, floating rates of return. The financing, structured as privately-placed bonds linked to revenue, is secured by the sale of future airline tickets from AirAsia’s key routes, the people said. Evercore Asia Ltd is AirAsia’s financial advisor, while A&O Shearman is its international counsel. Milbank LLP is representing the lenders. Ares declined to comment. A&O Shearman, Evercore, Indies and Milbank did not immediately respond to requests for comment. The financing from private credit funds will help 10 aircraft take flight by October and another 15 in 2025, said Bo Lingam, group CEO of AirAsia Aviation Group Ltd., an affiliate of AirAsia.<br/>