EX-99.1 2 ea021771101ex99-1_latam.htm MATERIAL FACT

Exhibit 99.1

 

 

MATERIAL FACT

LATAM AIRLINES GROUP S.A

Issuer of securities registered in the Securities Registry

 

Santiago, October 15, 2024

 

Mrs.

Solange Bernstein Jáuregui

President

Commission for the Financial Market

Av. Libertador Bernardo O'Higgins 1449

PRESENT

 

Ref.: Communicates MATERIAL FACT

_____________________________

From my consideration:

 

In accordance with Article 9 and second paragraph of Article 10 of Law No. 18,045 and with General Rule No. 30 and Circular No. 1,072 of May 14, 1992, both of the Financial Market Commission (the “Commission”), the undersigned, duly authorized for this purpose, hereby informs you of the following Material Fact with respect to LATAM Airlines Group S.A. (“LATAM”, the “Company” or the “Company”):

 

As previously reported, by means of a Material Fact dated October 1st, 2024, on this date, the Company has issued and placed placed in the international markets, secured notes for US$1,400 million, at an annual interest rate of 7.875% maturing in 2030 (the “US Notes”), under Rule 144-A and Regulation S of the Securities and Exchange Commission of the United States of America, under the Securities Act of 1933, of the United States of America (the “US Securities Act”).

 

Using the proceeds from the US Notes and an additional US$200 million in cash, LATAM paid and extinguished its obligations under the US$450 million notes, which had a scheduled maturity date in 2027 (the “2027 Notes”) and a coupon of 13.375%, along with the term financing in the amount US$1,081 million, maturing in 2027 (the “2027 Term Financing”), with a coupon of SOFR + 965 bps, equivalent to approximately 15%, all contemplated as part of the Company’s Chapter 11 Proceeding exit financing (the “Exit Financing”). If any, the remaining proceeds from the US Notes and cash reserves currently held by LATAM will be required to be used for working capital and other general corporate purposes.

 

As a consequence of the foregoing, and in accordance with Circular No. 988 dated January 16, 1991, issued by your Commission, the Company estimates annual savings in interest payments of approximately US$83 million and a one-time impact on the Company’s Income Statement of approximately US$134 million, of which US$45 will affect cash flow during the fourth quarter of the current year.

 

The US Notes will essentially be secured and share the same collateral package currently contemplated under the Exit Financing. However, in the event that the notes maturing in 2029, also issued in the context of the Exit Financing, are refinanced, the Company will have the option to release part of the collateral related to the cargo business.

 

The US Notes have been sold to qualified institutional buyers in the United States in accordance with US Securities Act and have not been registered under the Securities Act or the securities laws of any state or other jurisdiction.

 

The form required by the aforementioned Circular No. 1,072 is attached hereto.

 

Without further particular, yours sincerely,

 

Ramiro Alfonsín B.

Vice President of Finance

LATAM Airlines Group S.A.

 

Dc.:

Santiago Stock Exchange, Stock Exchange.

Chilean Electronic Stock Exchange, Stock Exchange.

 

 

 

 

 

 

MATERIAL FACT FORM

 

Circular No. 1,072

 

FOREIGN NOTE PLACEMENT

 

US NOTES

 

1.0IDENTIFICATION OF THE ISSUER

 

1.1

Corporate Name

 LATAM Airlines Group S.A. (the “Company”, the “Corporation”, or the “Issuer”).
1.2

Trade Name

 LATAM
1.3

Tax ID

 89.862.200-2
1.4

Securities Registration Number

 N/A due to the application of Law No. 21,521
1.5

Address

Presidente Riesco 5711, 20th floor, Las Condes, Santiago, Chile.

1.6

Telephone

 56 (2) 2565-3844
1.7 Business Activities

The Company’s purpose is the transportation of cargo and passengers by air.

 

2.0THIS COMMUNICATION IS MADE IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 9 AND THE SECOND PARAGRAPH OF ARTICLE 10 OF LAW No. 18,045, AND IT CONCERNS A MATERIAL FACT RELATING TO THE COMPANY, ITS BUSINESS, ITS PUBLICLY OFFERED SECURITIES, AND/OR THEIR OFFERING, AS APPLICABLE.

 

3.0CHARACTERISTICS OF THE ISSUANCE

 

3.1 Currency denomination United States Dollars (“US$”).
3.2 Total issuance amount US$1,400,000,000
3.3 Bearer / Registered Registered, in the name of The Depository Trust Company (DTC), for the benefit of noteholders from time to time.
3.4 Series Single.
3.4.1 Amount of the series US$1,400,000,000 (corresponding to the total amount of the issuance).
3.4.2 No. of notes N/A.
3.4.3 Nominal value of the notes The notes will be issued in minimum denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.
3.4.4 Adjustment type N/A.
3.4.5 Interest rate 7.875% per annum.
3.4.6 Issuance date October 15, 2024
3.4.7 Amortization schedule          
    Date Balance Amortization Interest Payment
    October 15, 24 1,400,000.000 0 0 0
    April 15, 25 1,400,000.000 0 55,125,000 55,125,000
    October 15, 25 1,400,000.000 0 55,125,000 55,125,000
    April 15, 26 1,400,000.000 0 55,125,000 55,125,000
    October 15, 26 1,400,000.000 0 55,125,000 55,125,000
    April 15, 27 1,400,000.000 0 55,125,000 55,125,000
    October 15, /27 1,400,000.000 0 55,125,000 55,125,000
    April 15, 28 1,400,000.000 0 55,125,000 55,125,000
    October 15, 28 1,400,000.000 0 55,125,000 55,125,000
    April 15, 29 1,400,000.000 0 55,125,000 55,125,000
    October 15, 29 1,400,000.000 0 55,125,000 55,125,000
    April 15, 30 0 1,400,000,000 55,125,000 1,455,125,000
3.5. Collateral YES     ☑    NO  ☐
3.5.1 Type and amount of collateral The US Notes are secured by security interests granted in Chile and abroad, including, but not limited to, pledges on shares and other assets, constituted by the Issuer and/or its subsidiaries, conditional assignment of rights, and joint and several guarantees from certain subsidiaries of the Issuer.
3.6 Extraordinary Amortization YES     ☑    NO  ☐
3.6.1 Procedures and dates As described in greater detail on pages 97 to 100 of the offering memorandum used for the issuance, which is attached as Annex No. 1 to this form, LATAM Airlines Group S.A. may or must redeem all or part of the US Notes, optionally or mandatorily, prior to maturity, in the manner and at the times set forth on those pages. Furthermore, those pages describe the procedure, selection method, and required notices for the redemption of the US Notes.

 

 

 

  

 

 

4.0OFFERING:

 

Public               Private  ☑

 

5.0COUNTRY OF PLACEMENT

 

5.1 Name United States of America.
5.2 Rules for obtaining authorization to trade Private placement under Rule 144A and Regulation S of the United States Securities and Exchange Commission (the “SEC”), under the Securities Act of 1933, United States of America.

 

6.0INFORMATION TO BE PROVIDED

 

6.1 To future noteholders

The Offering Memorandum, attached to this Form as Annex No. 1.

 

Additionally, as long as the payment of principal and interest on the US Notes remains outstanding, within 30 days following the day the Company files its annual report with the SEC, and other documentation and background information required under the Securities Exchange Act of the United States of America, the Company must submit such information to the Trustee.

 

6.2 To future representatives of noteholders

The Offering Memorandum, attached to this Form as Annex No. 1.

 

Additionally, as long as the payment of principal and interest on the US Notes remains outstanding, within 30 days following the day the Company files its annual report with the SEC, and other documentation and background information required under the Securities Exchange Act of the United States of America, the Company must submit such information to the Trustee.

 

 

7.0CONTRATO DE EMISION

 

7.1 General characteristics The agreement, written in English and titled Indenture, was executed on October 15, 2024, among others, by LATAM Airlines Group S.A. as issuer, and Wilmington Trust, National Association, as Trustee and Collateral Trustee. Through this agreement, US Notes were issued to be placed in foreign markets under Rule 144-A and Regulation S of the SEC, pursuant to the Securities Act of 1933 of the United States, for an amount of US$1,400,000,000, with a scheduled maturity date of April 15, 2030, and a placement interest rate of 7.875% per annum.
7.2 Rights and obligations of noteholders

These are outlined in the Indenture and include the customary rights and obligations typical for transactions of this nature, such as timely payment of principal and interest, along with additional amounts as applicable, the right to demand early repayment in case of default, and the right to request information, among others.

Noteholders may accelerate the payment of all principal, interest, and any other sums owed under the issuance agreement if the events of default described on page 118 and following of the Offering Memorandum, attached as Annex No. 1 to this Form, occur.

The transfer of notes is subject to the restrictions detailed on page 125 and following of the Offering Memorandum, which is also attached as Annex No. 1 to this Form.

 

8.0OTHER IMPORTANT INFORMATION

 

●The US Notes have not been registered in the United States of America under the Securities Act of 1933, and therefore may only be sold to certain qualified institutional buyers in accordance with Rule 144-A of that law, and outside the United States in accordance with Regulation S of the same law. The US Notes have not been and will not be registered in the Securities Registry of the Financial Market Commission.

 

●On October 1, 2024, LATAM Airlines Group S.A., as issuer and seller, and Citigroup Global Markets Inc., as representative of the initial purchasers, along with certain subsidiaries of the Issuer as guarantors, entered into a Purchase Agreement under which said initial purchasers acquired the totality of the notes.

 

9.0DECLARATION OF RESPONSIBILITY

 

The undersigned, in his capacity as [●] of LATAM Airlines Group S.A., in order to comply with the provisions of Circular No. 1,072, hereby declares and certifies, under oath and with full legal responsibility, the truthfulness and authenticity of all the information presented in and attached to this “Material Fact Form for Foreign Notes Placement”, dated October 15, 2024.

 

Ramiro Alfonsín B.

Vicepresident of Finance

LATAM Airlines Group S.A.

 

 

 

 

 

 

ANNEX No. 1

 

Offering Memorandum