Linklaters advises the lenders on the US$6bn restructuring of Nordic Aviation Capital

Linklaters has advised an ad hoc group of lenders under a revolving credit facility, along with creditors under certain other bilateral and Schuldschein facilities (the “Facilities Group”) on the landmark US$6bn restructuring of Nordic Aviation Capital (“NAC”). NAC is an industry leading regional aircraft lessor, serving over 60 airlines globally. The restructuring was implemented through a Chapter 11 process in the US Bankruptcy Court, and was the largest Chapter 11 filing made in 2021. The deal also represents one of the largest bankruptcy proceedings ever undertaken by an aircraft leasing company.

The Chapter 11 plan became effective on 1st June 2022, implementing the deal that was agreed to in December 2021 when substantially all of NAC’s creditors signed up to a restructuring support agreement. The deal involved certain creditors (including the Facilities Group) (the “Equitising Creditors”) agreeing to a significant debt-for-equity swap, the injection of approximately US$537 million into the group via a rights issue and a new super senior credit facility, and a significant corporate reorganisation which has seen a new holding company incorporated, as well as new board of directors appointed. The restructuring process also facilitated the managed exit of certain financing silos away from the main NAC group. NAC therefore emerges from the Chapter 11 well-posited for the future.

The restructuring involved granting of new security over aircraft held within the NAC29 part of the NAC group. The bespoke security package, which Linklaters helped design, covered numerous jurisdictions. This was a rare example of security over such a large number of aircraft being taken at once, in such a short period of time.

The cross-border Linklaters team was led by partners Rebecca Jarvis (Restructuring & Insolvency, London), Olga Petrovic (Asset Finance, London), and Robert Trust (Banking, New York), and supported by partners Caroline Courtney (Asset Finance, London) and Christopher Hunker (Banking, New York), together with counsel Klaudia Królak (Banking, Warsaw), senior US associate Nicholas Vislocky (Banking, New York) and managing associate Sam Kennerley (Restructuring & Insolvency, London). The team was also supported by a cross-border team of colleagues across various jurisdictions.