Linklaters acts on Nordic Aviation Capital's US$6bn debt restructuring
- Nordic Aviation Capital is the first large aircraft leasing company to undergo a restructuring process due to Covid-19
- The restructuring was the first in the aircraft leasing sector to be implemented through a solvent Irish scheme of arrangement which restructured approximately US$6 billion of English, New York and German law governed debt.
Linklaters acted for the ad hoc committee of unsecured RCF lenders on the restructuring of approximately US$6 billion of debt owed by Nordic Aviation Capital (“NAC”) implemented by way of a solvent Irish scheme of arrangement and certain bilateral arrangements (the “Scheme”).
Unanimously approved by creditors, the Scheme was sanctioned by the Irish High Court and received recognition under Chapter 15 of the US Bankruptcy Code. The Scheme implemented a 12-month standstill and deferral of payments of principal and interest on NAC’s borrowings over the subsequent 12 months.
The Scheme was novel in the market as it involved a scheme of the parent entity as guarantor, in respect of debt that was owed by its affiliates. The guarantor structure was used to implement a single scheme of the Irish parent company (as guarantor of substantially all of the group's debt) so that the various secured facilities, which had different borrowers, could be grouped into a single class allowing a cramdown of the secured debt. The unsecured debt was then grouped into a single unsecured class. The use of a common guarantor with a “single point of entry” across the relevant financings of the group allowed a single scheme to be implemented across 89 facilities governed by a combination of English, New York and German law.
The Scheme also involved granting the unsecured lenders new security over the entirety of the previously unsecured fleet of 236 aircraft held within the NAC29 part of the NAC group. The bespoke security package, which Linklaters helped design, included English, Maldivian, Greek, French, Polish, Trinidadian and New York (FAA) law aircraft security and was a rare example of security over such a large number of aircraft being taken at once, in a short period of time. Nordic Aviation Capital is the world's largest regional aircraft lessor, serving 75 airlines in 51 countries and the first large aircraft leasing company undergo a restructuring process due to the impact of Covid-19.
Linklaters’ aviation practice has built a reputation advising on many of the industry’s most significant transactions. Our global aviation platform, cross-disciplinary approach and in-depth industry knowledge gives us a unique advantage to navigate the complexities our clients are facing. Our aviation finance lawyers have substantial experience in all products deployed in complex structured financings in the sector. We frequently advise airlines, financial institutions, non-bank investors, lessors and airports and airport investors in connection with a variety of transactions across the credit spectrum.
Linklaters’ global restructuring and insolvency practice handles the world’s most challenging and significant domestic and cross-border restructuring and insolvency assignments. Linklaters acts for the full range of stakeholders in relation to the restructuring and insolvency mandates, including debtors, senior and junior creditors, banks, funds, bondholders, swap and derivative counterparties, insolvency practitioners, shareholders, regulated counterparties and directors.