Aeroméxico Launches $1.1B Private Note Offering

Grupo Aeroméxico, the parent company of Aeroméxico, has announced a private offering totaling over $1.1 billion in senior secured notes, marking a strategic financial move to improve its debt profile and support future corporate needs. The offering includes $500 million in senior secured notes due in 2029 with an interest rate of 8.25%, along with $610 million in senior secured notes due in 2031 carrying a coupon of 8.625%.

Purpose of the Offering

Aeroméxico intends to use the majority of the proceeds from this note issuance to refinance existing debt. Specifically, the funds will redeem senior secured notes due in 2027, which currently have an outstanding principal amount of $662.5 million. The remaining funds raised will be allocated for general corporate purposes, providing the company with additional liquidity to support its operational and strategic goals.

This offering is part of Aeroméxico’s ongoing effort to streamline its financial structure after a challenging period that included a Chapter 11 bankruptcy restructuring in 2020. Aeroméxico successfully exited bankruptcy in early 2022 and has since taken measures to strengthen its financial foundation, including securing a $200 million loan from BBVA México in August 2024, marking its return to the Mexican banking market.

Guaranteed by Key Aeroméxico Subsidiaries

The new notes are backed by guarantees from several key subsidiaries of Grupo Aeroméxico, including Aeroméxico itself, Aerolitoral S.A. de C.V. (operating as Aeroméxico Connect), Aeroméxico Cargo, and loyalty program provider PLM Premier S.A.P.I. de C.V. This structure provides investors with added security, backed by Aeroméxico’s primary business units.

Aeroméxico Connect, the group’s regional carrier, plays a vital role in the airline’s domestic and international network, while Aeroméxico Cargo services the growing demand for air freight across the Americas. PLM Premier manages the airline’s loyalty program, providing a steady revenue stream and fostering customer loyalty.

Aeroméxico’s Expanding Network and Fleet

According to ch-aviation, Aeroméxico currently operates flights to 98 airports across 23 countries. The airline’s diverse fleet includes 156 aircraft, consisting of five B737-700s, thirty-six B737-8s, thirty-four B737-800s, twenty-one B737-9s, eight B787-8s, and fourteen B787-9s. In addition, Aeroméxico Connect operates thirty-eight Embraer E190 aircraft, enhancing regional connectivity within Mexico and to select international destinations.

Aeroméxico’s fleet strategy reflects its commitment to offering a blend of modern, fuel-efficient aircraft capable of servicing both long-haul international routes and regional destinations. The airline has strategically positioned itself as a key player in Latin American air travel, leveraging its network and fleet to capture demand in both business and leisure segments.

Recent Financial Milestones

The latest debt offering follows Aeroméxico’s recent financial advancements, including its restructuring and delisting from the Mexican Stock Exchange in 2022. By consolidating its financial resources and refinancing debt at a time when demand for travel is rebounding, Aeroméxico is focused on maintaining a stable path forward. The move is also a sign of confidence in the airline’s ability to leverage increased liquidity for operational and strategic initiatives.

With demand for international and regional air travel rising, Aeroméxico’s improved financial flexibility positions it to capitalize on new opportunities within the aviation industry, while also ensuring it has the resources to manage its extensive route network and fleet operations. This private note issuance reaffirms Aeroméxico’s commitment to enhancing its financial health and sustaining growth in the competitive Latin American airline market.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com