Nordic Aviation Lenders Seek Exit Ahead of Debt Freeze Deadline

Bank lenders are seeking to cut their exposure to one of the world’s largest aircraft lessors before a moratorium on debt payment ends next month.

An unnamed lender to a unit of Nordic Aviation Capital AS is seeking to sell a $50-million portion of a credit facility this week, according to people familiar with the matter, who asked not to be identified because they aren’t authorized to speak publicly about it.

The seller may dispose of the debt, which is secured by assets held in NAC Aviation 29 DAC, at roughly a 30% discount to face value, they said. A representative for Nordic Aviation declined to comment on the potential loan sale.

Founded in Denmark in 1990, Nordic Aviation leases almost 500 aircrafts to about 75 airline customers and has about $5.9 billion of debt backed by different assets held in subsidiaries, a separate person familiar with the matter said. The company is seeking to draw a restructuring plan that will capitalize on an expected pick up in international travel.

Sculptor Capital Management is one of the investment funds that have previously bought bank loans to Nordic Aviation, the people said. A spokesperson for Sculptor declined to comment.

Payment Freeze

Last year, the lessor agreed a debt payment freeze with creditors to last until the end of June 2021. It recently reached a deal to extend the maturity until July 31, one of the people said. Major Nordic Aviation’s shareholders -- Singapore’s sovereign fund GIC and private equity firm EQT Partners -- have said they won’t contribute further to support the business after injecting $60 million of fresh funds in 2020.

The company’s founder and shareholder, Martin Moller Nielsen, told Danish newspaper Borsen in March that the lessor would need a “miracle” to avoid a restructuring.

©2021 Bloomberg L.P.

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