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UPDATE 1: Court Grants Azul Exit Financing Motion, Orders Disclosure of Some Fees for Lead Arrangers
Thu Jan 08, 2026 12:05 PM ET: At an uncontested hearing today, Judge Sean Lane granted the Azul debtors’ motion to enter into and perform under exit financing engagement letters with Barclays and Citi as lead arrangers (discussed below). The arrangers will canvass the market to determine if there is a better offer for $1.2 billion of exit financing than converting certain DIP claims into an exit facility.
Debtors’ counsel Joshua Sturm of Davis Polk said the lead arrangers hope to begin the marketing process in the “near term” for better exit financing, which could take the form of new first lien notes or private debt.
Judge Lane also granted in part the debtors’ related sealing motion. The judge ruled the arrangement fee and structuring fee for Barclays and Citi can remain under seal because they have “no impact on the estate,” since the debtors’ investment banker Guggenheim has agreed to reduce its financing fees by the same amount. However, Judge Lane said the lead arrangers’ other fees and expense caps must be publicly disclosed.
Original Story 9:37 a.m. UTC on Dec. 26, 2025
Azul Hires Barclays, Citi as Lead Arrangers to Canvass Market for $1.2B DIP Refinancing
The Azul debtors selected Barclays and Citi as lead arrangers to determine if there is a better offer for $1.2 billion of exit financing than converting certain DIP claims into an exit facility. The debtors are seeking court approval of the arranger’s engagement, according to a motion filed Dec. 24. The key terms of the engagement are summarized HERE.
Azul’s confirmed plan contemplates $1.2 billion of exit financing and provides that the financing can be raised in one of two ways: First, either conversion of certain DIP claims into a take-back exit notes facility under pre-agreed terms, and, second, more favorable financing.
The motion is scheduled to be heard on Jan. 8 at 11 a.m. ET, and objections are due Jan. 2 at 4 p.m. ET.
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