UPDATE 1-Brazil airline Azul to issue $149 mln add-on to refinance debt
(Updates throughout with Moody's note, share price, context)
SAO PAULO, Feb 5 (Reuters) - Brazilian airline Azul said on Monday that it had launched a $148.7 million add-on to previously issued 2028 senior notes, which it will use to refinance debt.
The bonds were initially issued in July for $800 million by a subsidiary of the carrier, Azul Secured Finance, with an 11.930% yield.
Sao Paulo-listed shares in the carrier were down 5.5% in early afternoon trading, while competitor Gol's fell 3.2%.
Azul wrapped up restructuring obligations late last year with lessors and equipment manufacturers in a bid to boost its capital structure and cash flow.
The airline's leverage is expected to drop to around 4.0x to 5.0x by 2025, Moody's Investors Service said on Monday, from 6.4x at end-September.
Other Latin American carriers have struggled since the coronavirus pandemic hit air traffic in 2020. Colombia's Avianca, Chile's LATAM Airlines and Mexico's Aeromexico have come out of bankruptcy proceedings, while Gol filed for Chapter 11 bankruptcy protection at the end of January.
Brazil's government is working on measures to bring down costs as air travel remains prohibitive for consumers.
On Monday, Finance Minister Fernando Haddad said the government will draw up a proposal by the end of the month to "enable a restructuring of the sector."
"We're going to better understand what's going on, and there's no bailout with treasury money, that's not in our plans," Haddad told journalists in Rio de Janeiro.
($1 = 4.9953 reais) (Reporting by Alberto Alerigi Jr. and Kylie Madry; Additional reporting by Peter Frontini; Writing by Steven Grattan; Editing by Kirsten Donovan)
