ACI Airport gets needed consents to amend 6 7/8% notes due 2032

By Marisa Wong

Los Angeles, May 15 – Uruguay’s ACI Airport Sudamerica, SA said holders had tendered $184,297,000, or 92.15%, of its 6 7/8% senior secured guaranteed notes due 2032 (Cusips: 00102JAA3, E0351QAA0) as of 5 p.m. ET on May 14, the early participation deadline of its previously announced exchange offer and consent solicitation.

ACI Airport began the offer on April 24 to repurchase and exchange any and all of its outstanding 6 7/8% senior secured guaranteed notes due 2032 for newly issued 6 7/8% cash/7 7/8% PIK senior secured guaranteed notes due 2032. The original aggregate principal amount of the existing notes was $200 million.

All of the early tendered notes have been accepted for exchange, according to a Thursday press release.

The early participation deadline and withdrawal deadline had been extended from 5 p.m. ET on May 7, as previously reported.

The company is concurrently soliciting consents from holders of the existing notes to some proposed amendments to the existing indenture.

Based on the participation received as of the early participation date, the company has obtained the necessary consents to effect the proposed changes to the indenture governing the existing notes, according to Thursday’s press release.

The proposed amendments would, among other things, provide for the issuance of the new notes as additional notes under the existing indenture and eliminate substantially all of the restrictive covenants and events of default and related provisions with respect to the existing notes.

In addition, with respect to the existing notes and the new notes, tendering holders will be required to (a) waive the non-compliance of certain distribution obligations of the company and its subsidiaries, solely with respect to the upcoming May 29 payment date and (b) agree to forebear exercising remedies with respect to any events of default under the amended and restated indenture that would result from such non-compliance.

Holders who tender their notes in the exchange offer will be deemed to have given their consent to the proposed amendments and the waiver under the consent solicitation.

The exchange offer and consent solicitation will expire at 11:59 p.m. ET on May 21.

Holders who tendered their notes and deliver consents by the early participation deadline will be eligible to receive the exchange consideration, which is equal to $1,000 principal amount of new notes for each $1,000 principal amount of existing notes tendered, plus an early participation premium in cash of $10 for each $1,000 of notes.

Holders will also receive accrued interest to but excluding the settlement date, which is expected to be May 26. Accrued interest will be paid entirely in additional principal amount of new notes.

For purposes of determining the exchange consideration and the early participation premium for any existing notes accepted for exchange, the outstanding principal amount of the existing notes will be the $200 million original principal amount multiplied by an applicable amortization factor as of the settlement date.

The exchange offer is conditioned on holders of at least 80% of the outstanding principal amount of the existing notes tendering their notes for exchange.

As previously announced, at any time after the withdrawal deadline and before the expiration time, if the company receives consents from holders of an aggregate principal amount of existing notes sufficient to satisfy the minimum exchange amount condition, the company may execute and deliver the amended and restated indenture giving effect to the proposed amendments and the waiver. The amended indenture would be effective upon execution but would only become operative upon settlement of the exchange offer.

New notes

The new notes will be issued under an amended and restated indenture that updates the indenture dated May 7, 2015 governing the existing notes.

The terms of the new notes will be substantially identical to the terms of the existing notes, except for the following:

• Interest and the principal amount of the new notes will be repaid in 26 installments on May 29 and Nov. 29 of each year, provided that for the period from and including the settlement date of the exchange offer to and including the payment date falling on May 29, 2021, the company may elect not to pay principal and interest due on the new notes in cash and may instead (a) pay any interest due in kind by increasing the principal balance on the new notes by the amount of that interest and (b) defer any principal due with those deferred amounts to be repaid on a new amortization schedule, in which case each remaining scheduled principal payment on the new notes will be increased by a pro rata amount equal to that aggregate amount of principal deferred and interest paid in kind during the PIK period and the interest rate on the new notes will be increased to 7 7/8% per annum with respect to any interest period for which the company has made that election;

• The company has elected that no principal or interest will be paid in cash on the May 29 payment date with respect to the new notes and each such payment will automatically be deemed a PIK principal payment and a PIK interest payment, as applicable;

• At any time and from time to time, the company will have the right, at its option, to redeem the new notes in an amount not to exceed the aggregate amount of all PIK principal payments and PIK interest payments then outstanding at a redemption price equal to par plus accrued interest and additional amounts, if any, to the redemption date, provided that the aggregate principal amount of any such redemption is at least $1 million; and

• Substantially all of the restrictive covenants and events of default and related provisions under the existing indenture will be eliminated solely with respect to the existing notes.

The company said the exchange offer and consent solicitation are part of its plan to mitigate the impact of the unprecedented Covid-19 pandemic that has heavily impacted the global aviation sector.

D.F. King & Co., Inc. (888 541-9895 or 212 269-5550 or aciairport@dfking.com) is the information and exchange agent for the Rule 144A and Regulation S offer.

Based in Montevideo, Uruguay, ACI Airport Sudamerica is the sole stockholder of Cerealsur SA. Cerealsur is a holding company and through its wholly owned subsidiary, Puerta del Sur SA, operates the Carrasco International Airport.

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