A&O Shearman advises AirAsia on the issue of USD443 million Revenue Bonds

The Revenue Bonds comprise USD243m Tranche A Bonds and USD200m Tranche B Bonds.

The bonds were issued by a Labuan subsidiary of AirAsia and secured on future ticketing receivables of AirAsia under certain flight routes. This structure is a first-of-its kind in Asia Pacific and is instrumental in refinancing existing lease liabilities and securing new capital to facilitate the reactivation of aircraft grounded during the Covid-19 pandemic.

This transaction is a critical component of AirAsia's broader capital restructuring program, marking a pivotal step in the airline's recovery from the pandemic.

James Yao, A&O Shearman partner, commented: “This innovative structure, secured against future ticketing receivables, marks a crucial step in AirAsia's capital restructuring, illustrating the airline's resilience in navigating post-pandemic challenges. It not only demonstrates a forward-thinking approach but also reflects the robust confidence the market holds in its long-term vision and operational excellence. This will serve as a cornerstone for AirAsia’s continued success and we’re proud to have played a role in that.”

The team advising the AirAsia as to English law note documents was led by partner James Yao with support from Jamie Taylor (counsel), Kaixi Yang (associate) and Michael Leung (trainee solicitor). Matthew Bisley (partner) assisted AirAsia in relation to the lease amendments.