Herbert Smith Freehills has advised easyJet as the low-cost airline achieved a ‘double first’, becoming the first airline to secure a loan through UK Export Finance’s Export Development Guarantee (EDG) scheme whilst the transaction also marked the first secured EDG facility to reach financial close.
Valued at $1.87 billion, the financing has been underwritten by a syndicate of 10 banks. The term of the loan is for a period of 5 years and allows easyJet to refinance existing commercial debt and further boost liquidity. The loan was secured against a portion of its existing fleet of aircraft.
The EDG helps UK exporters access high value loan facilities for general working capital or capital expenditure purposes. It is managed by UK Export Finance, the UK government’s export credit agency for trade finance and insurance, to provide guarantees to assist with accessing commercial loans.
Herbert Smith Freehills' London Aviation Finance team was led by partner Jahnavi Ramachandran. She was supported in London by senior associate Tim Hunter-Jones, of counsel Soumya Rao, associates Kate Alexander and Demilade Banjoko and trainee solicitor Emma Hallam, with assistance from Johannesburg associate Nathan Mallinson and candidate attorney Luke Smith. Tax partner Casey Dalton and associate David Alexander advised on tax aspects.
Jahnavi Ramachandran commented: "In the current economic climate, this transaction will go some way towards providing easyJet with additional financial security. For companies such as easyJet who meet the required eligibility criteria, the EDG provides a welcome new source of funding that both strengthens the balance sheet and offers access to further liquidity in what remains a challenging market.”
Herbert Smith Freehills' role advising easyJet in this transaction comes shortly after the firm was appointed to the airline’s panel of legal advisers. It builds on Herbert Smith Freehills’ extensive experience in the aviation sector, which includes acting for export credit agencies, financial institutions, investors, airlines, lessors, equity and debt providers, sponsors, arrangers, insurers and other participants on a wide range of aviation finance transactional and advisory matters.