Herbert Smith Freehills Advised Virgin Australia on Asia Pacific’s First US$797.2 Million Enhanced Equipment Notes Offering

Herbert Smith Freehills has advised Virgin Australia Holdings Limited on its ground breaking US$797.2 million enhanced equipment note offering, the first of its kind in Asia Pacific. The offering closed on 22 October.

The enhanced equipment notes offering structure is a form of aircraft financing commonly used by U.S. airlines known as enhanced equipment trust certificates (EETC).

The deal is backed by an existing fleet of 24 aircraft operated by Virgin Australia.  Proceeds will be used to repay existing financing facilities and for general corporate purposes.

The Herbert Smith Freehills team was jointly led by Sydney-based partner John Angus and Singapore partner Rod Howell. John and Rod were supported by Sydney, Brisbane and Singapore partners including Matthew Fitzgerald, Amanda Wales, Mark Clifton and Siddhartha Sivaramakrishnan and Greenwoods & Freehills director, Andy Hirst.

Herbert Smith Freehills’ successful representation on the deal highlights the firm’s regional asset finance capability, EETC product expertise, leading Australian law offering and U.S. securities platform.

Rod Howell commented: “Only a handful of firms have experience in bringing to market the “enhanced equipment note/certificate” structure outside of the US and the ability to combine these with a knowledge and sensitivity of local legal frameworks and conditions.”

John Angus commented. “We are very proud to have been able to assist key client Virgin Australia in the successful implementation of its ground breaking Enhanced Equipment Note transaction.  The deal provides an important, stable and alternative source of funding for Virgin Australia and the quality of the transaction is evident in the strength of support from investors.”

ASX-listed Virgin Australia is one of two principal air carriers in Australia.

Goldman Sachs acted as sole structuring agent and lead bookrunner together with Credit Agricole Securities and Natixis as joint bookrunners on the transaction.


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