By Brazil Stock Guide – Azul S.A. (B3: AZUL53; OTC: AZULQ) said it has launched a private offering of senior secured notes due in 2031, a key step to fund its exit from Chapter 11 proceedings in the US and stabilize its capital structure after months of creditor negotiations.
The issuance will be carried out by subsidiary Azul Secured Finance LLP and is primarily intended to fully repay the company’s debtor-in-possession financing. Any remaining proceeds may be used to support the implementation of Azul’s court-approved restructuring plan, aimed at reducing leverage and strengthening liquidity.
Moody’s Ratings assigned a B2 rating to both Azul and the exit financing notes, with a stable outlook. Fitch Ratings gave the airline and the offering an expected B- rating, also with a stable outlook, subject to confirmation upon completion of the Chapter 11 restructuring.
Collateral Structure and Strategic Assets
The notes will be backed by guarantees from Azul and its main operating subsidiaries, alongside a collateral package that includes receivables from Azul Fidelidade, Azul Viagens and Azul Cargo. The structure also covers trademarks, domain names, intellectual property and equity interests across key group entities.
The transaction underscores the growing role of non-core aviation assets in supporting airline balance sheets. Loyalty programs, logistics and travel services have become central negotiating tools with creditors, mirroring patterns seen in global airline restructurings.
What Is at Stake in the Chapter 11 Exit
Completing the offering would allow Azul to replace short-term emergency funding with longer-dated debt, albeit at a high cost and with strong creditor protections. For investors, the move reduces near-term uncertainty while leaving exposure to leverage and a highly competitive airline market.
The company said it remains on track to meet milestones outlined in the restructuring plan, prioritizing financial discipline and operational continuity. Final terms of the offering, however, remain subject to market conditions, which are likely to shape investor appetite and Azul’s effective cost of capital over the coming quarters.