Azul Charts Recovery Course with New Debt, Upgraded Credit Outlook

SÃO PAULO, BRAZIL – January 28, 2026 – Azul S.A., Brazil's largest airline by cities served, has taken a decisive step toward completing its financial restructuring, announcing the launch of a major debt offering intended to fund its exit from Chapter 11 bankruptcy. The move was accompanied by new, stable credit ratings from Moody's and Fitch, signaling growing confidence in the carrier's post-reorganization future.

The company's Delaware-based subsidiary, Azul Secured Finance LLP, is launching a private offering of senior secured notes due 2031. This "Exit Financing Offering" is the linchpin of a strategy designed to close the book on a turbulent period and reposition the airline for sustained growth in the competitive Latin American market.

A Strategic Path Out of Bankruptcy

Azul's announcement marks a critical milestone in its court-supervised restructuring process, which began on May 28, 2025, when the airline voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York. The filing was a strategic maneuver to address significant liquidity challenges and reorganize liabilities while continuing normal operations.

The Chapter 11 plan, which gained overwhelming creditor support and was confirmed by the court on December 19, 2025, was ambitious. It aimed to eliminate over US$2.0 billion in debt from the airline's balance sheet and raise new capital through an equity rights offering of up to $950 million. A key component was securing approximately $1.6 billion in debtor-in-possession (DIP) financing, which provided the immediate liquidity needed to maintain its extensive network of nearly 800 daily flights.

The newly announced offering of senior secured notes is designed primarily to repay the outstanding principal on that DIP financing. According to the company's statement, any remaining proceeds will be used to "support the implementation of its comprehensive and permanent restructuring plan aimed at optimizing its capital structure and enhancing its liquidity position." This move effectively replaces temporary bankruptcy financing with long-term capital, a classic and essential step for any company emerging from Chapter 11.

The Anatomy of the Deal

The senior secured notes, maturing in 2031, are structured to be attractive to a market that is cautiously optimistic about the airline industry's recovery. The debt is not just a simple promise to pay; it is backed by substantial guarantees and a robust collateral package, offering investors a significant layer of security.

The notes will be guaranteed by the parent company, Azul S.A., and its key operating subsidiaries, including its primary airline business, Azul Linhas Aéreas Brasileiras S.A., and its logistics arm, Azul Conecta Ltda.

More importantly, the debt is secured by first-priority liens on some of Azul's most valuable and consistent revenue-generating assets. The collateral includes receivables from:
* Azul Fidelidade: The airline's popular loyalty program.
* Azul Viagens: The company's travel package and tourism business.
* Azul Cargo: The rapidly growing cargo division.

In addition to these cash-flow streams, the collateral package includes intellectual property such as brands and domain names associated with the airline and its subsidiaries. By pledging these crown-jewel assets, Azul is providing tangible security to bondholders, which typically results in more favorable borrowing terms. This structure highlights the strategic value of Azul's diversified business units beyond just passenger ticket sales and was a critical factor in securing the new credit ratings. While the terms are subject to market conditions, the structure itself is a testament to the perceived strength of these ancillary businesses.

A Vote of Confidence from Credit Agencies

Concurrent with the debt offering, Azul received a crucial endorsement from two of the world's leading credit rating agencies. Moody's Ratings assigned a B2 Corporate Family Rating to Azul and a B2 rating to the new notes, both with a stable outlook. Fitch Ratings assigned an expected B- rating to the company and the offering, also with a stable outlook, which it expects to finalize once the Chapter 11 process is officially complete.

While these ratings fall within the "highly speculative" category, indicating that risks remain, the "stable" outlook is the most significant part of the story. It suggests that the agencies believe Azul's financial profile is unlikely to deteriorate in the near term and that the company is on a solid footing to execute its business plan. This is a dramatic turnaround from the distressed financial state that precipitated the bankruptcy filing less than a year ago.

According to the agencies, their decisions were based on the successful implementation of the steps laid out in the Chapter 11 plan. The ratings reflect a de-leveraged balance sheet, an improved liquidity profile, and a more sustainable capital structure. For investors, these ratings provide a standardized measure of risk and signal that the foundational elements of a successful corporate turnaround are in place. The stable outlook may also lower the airline's future cost of capital as it continues to prove its financial discipline.

Reshaping Brazil's Skies

With its finances being reorganized and its liquidity set to improve, a revitalized Azul is poised to intensify competition in the Brazilian aviation market. The airline, already the leader in destinations served, will be in a much stronger position to challenge its main rivals, LATAM and GOL.

A healthier balance sheet provides Azul with greater strategic flexibility. It could enable more aggressive fleet management, including the addition of more efficient, next-generation aircraft. It could also fuel network expansion, allowing the airline to add frequencies on profitable routes or venture into new, underserved markets, further cementing its unique network strategy.

Industry analysts believe this financial reset could lead to shifts in market share. A more confident Azul may be able to apply pressure on pricing, potentially benefiting consumers but challenging the profitability of its competitors. The successful restructuring, backed by major partners like United Airlines and American Airlines, positions Azul not just for survival, but for long-term leadership in one of the world's most important domestic aviation markets. The airline's ability to navigate a complex Chapter 11 process in under a year while maintaining its operational excellence—recognized by Cirium as one of the world's most punctual airlines—demonstrates a resilience that will now be backed by a much stronger financial foundation.

This successful financial maneuver is not just an internal victory for Azul; it sends a clear signal across the industry that the airline is re-emerging from its recent challenges as a formidable and strategically focused competitor, ready to reshape the skies over Brazil and beyond.