Brazil's Azul reaches deal with bondholders for up to $500m in fresh financing

Azul has reached a deal with its bondholders to obtain additional financing of up to $500m, the Brazilian airline said on Monday, as part of restructuring it expects to ease market concerns about its debt load. Azul, which dominates Brazil's airline industry along with LATAM and Gol, has managed to avoid the fate of a number of Latin American carriers who filed for bankruptcy after the COVID-19 pandemic, including its two main rivals. Sao Paulo-traded shares of the company soared more than 10% after the deal was announced, making them the top gainers in Brazil's benchmark stock index Bovespa, which was up 0.8%. The announcement comes after Reuters reported last week, citing sources, that Azul was in talks with multiple parties - including its bondholders and lender Jefferies - to raise about $400m in fresh capital via debt financing, and an agreement was near. The fresh capital was a condition of Azul's recent deal with lessors to scrap nearly $550m in obligations in exchange for an equity stake of around 20% of the firm, which analysts see as fundamental to strengthen the airline's cash position. "We expect a positive market reaction as the announced terms have ruled out Chapter 11 proceedings," Bradesco BBI analysts said in a note to clients. Under the deal with bondholders, the carrier said in a securities filing it will receive $150m this week and another $250m by year end in fresh debt, totaling $400m which it had been targeting.<br/>