airBaltic has called an electronic meeting of holders of its 14.50% bonds due in 2029 for 4 December 2026, seeking approval for security arrangements tied to its debtor-in-possession financing. The proposal would allow DIP lenders to take priority over bondholders’ existing security over certain assets, a step required for the airline to access later portions of its financing while it restructures under Chapter 11 in the United States.
The proposed priming arrangement is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York, with a hearing scheduled for 9 December. airBaltic believes it may be able to obtain court approval without bondholder consent, but is seeking approval from investors to make the process more efficient and help preserve company value.
Bondholders backing the resolution may qualify for a cash consent payment or elect to participate in a lower-priority tranche of the financing. The specific terms are set out in the meeting notice. The outcome of the vote and court hearing remains pending.
Strategic Value Partners arranged a DIP facility of up to €350 million, with Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners named as funders. The facility comprises tranches of €175 million, up to €125 million and up to €50 million; access to the latter two depends on authorisation to prime the bond collateral. airBaltic plans to continue operating flights and customer services as usual during the Chapter 11 proceedings.