Clifford Chance Oversees $6B Debt Restructuring For Major Aircraft Lessor
One of the world's leading regional aircraft lessors, Denmark's Nordic Aviation Capital, is seeking to improve its liquidity position amid the global crisis.
July 24, 2020 at 09:57 AM
3 minute read
Nordic Aviation Capital
Clifford Chance has advised one of the world's leading regional aircraft lessors on a debt restructuring, the firm announced.
Denmark-based Nordic Aviation Capital has restructured around $6 billion of debt, using a solvent Irish scheme of arrangement said to contain a number of innovative aspects designed by the law firm.
"Whilst NAC entered the current global crisis in a strong liquidity position, the resulting fall-out in the aviation sector has caused significant distress," Clifford Chance said in a statement.
"This restructuring aims to provide NAC with a stable platform whilst the aviation market recovers by deferring certain payments of principal and interest."
The scheme relied on the existence of a common guarantor across the affected financings in order to act as a single point of entry, with relief under the scheme terms then extended to each primary NAC debtor under the relevant financings, the law firm said.
"This approach allowed a single scheme to be implemented across 89 different facilities governed by a mixture of English, New York and German law, and reflecting a variety of different financing structures."
The Clifford Chance team was led by partners William Glaister (London, Asset Finance) and Philip Hertz (London, Restructuring).
On June 30, 2019, NAC said it had $1.7 billion of secured funding, and $1.4 billion of unsecured funding, for total sources of funds of $3.1 billion.
Nordic's fleet contains almost 500 regional aircraft.
Announcing a debt standstill on July 9, Søren M. Overgaard, NAC's CEO, said the COVID-19 pandemic had had a severe impact on global business in every sector, but particularly on the travel industry.
"As… with other leasing companies, we have seen a number of our lessees severely challenged during the pandemic and have granted them deferred payments of 40% of our revenue in the past six months."
Indeed, the global coronavirus pandemic has rocked the aviation industry. Earlier this month, Allen & Overy advised Virgin Atlantic on its £1.2 billion rescue deal, according to several people with knowledge of the mandate.
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