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LATAM Airways Group Leads South America’s Transition to Internet-Zero with $300 Million Modern Financing
Wednesday, December 4, 2024
LATAM Airways Group has marked a milestone by securing its first-ever “Sustainability-Linked Loan” amounting to $300 million. This achievement makes LATAM the only real airline in South America up to now to undertake such an modern monetary association.
The settlement, established with Crédit Agricole Company & Funding Banking and BNP Paribas, includes a revolving credit score facility. This association allows LATAM to entry further long-term funding at preferential rates of interest, contingent upon attaining particular sustainability targets.
The mortgage represents a refinancing of LATAM’s present “Spare Engine Facility” (SEF), a core part of the airline’s capital construction for over a decade. This refinancing has allowed LATAM to safe a decrease rate of interest, streamline the collateral necessities—lowering the variety of engines pledged as collateral—and prolong the power’s time period into the long run.
The transaction incorporates sustainability-linked phrases, providing LATAM potential pricing advantages based mostly on its efficiency in lowering carbon emission depth. This metric is calculated as tons of CO2 emissions relative to income per ton-kilometer (RTK). As LATAM’s first sustainable finance initiative, the deal aligns with the airline’s broader technique, reinforcing its dedication to attaining net-zero emissions by 2050.
