January 19, 2022 – The Debtors filed first drafts of their Plan of Reorganization and Disclosure Statement [Docket Nos. 186 and 187, respectively]; and separately filed a motion requesting Court approval of (i) the Disclosure Statement, (ii) proposed Plan solicitation and voting procedures and (iii) a proposed schedule culminating in a Plan confirmation hearing on April 19, 2022 [Docket No. 188].

The Limerick, Ireland based Debtors own the world's largest fleet of regional aircraft and filed for bankruptcy protection on December 19, 2021 with $5.9bn of funded debt ($5.4bn secured). At filing, the Debtors ($2.4bn net loss in 2020-2021 fiscal year) succinctly summed up the impact of the COVID pandemic on their operations: "customers are facing severe liquidity issues, and, simply put, NAC cannot collect cash that its customers do not have."

Plan Overview

The Disclosure Statement [Docket No. 187] notes, “As of the Petition Date, the Debtors are liable for approximately $5.9 billion in aggregate funded-debt obligations on account of various different financing and security structures that enable the Group to maximize tax efficiencies and business flexibility. The primary financing structures, the substantial majority of which are secured structures, include: (a) direct facilities; (b) finance leases; (c) JOLCOs; and (d) swaps.

The Restructuring Transactions embodied by the Restructuring Support Agreement and Plan will deleverage the Group’s balance sheet by approximately $[4.3] billion in debt pursuant to various equitization and sale transactions, provide for an infusion of approximately $537 million in new money in the form of an approximately $337 million equity rights offering and a $200 million new revolving credit facility, and, importantly, preserve customer relationships and the Group’s market leading position in the aircraft leasing industry.

To accommodate the Debtors’ diverse creditor constituencies, the Restructuring Support Agreement, the terms and conditions of which are embodied by the Plan, reflects a variety of differing restructuring and recapitalization transactions specific to each (or multiple) ad hoc group of creditors, as reflected by the various bespoke term sheets appended thereto. Specifically, the transactions contemplated under the Restructuring Support Agreement include, among others:

• DIP Facility: effectuation of an $170 million superpriority senior secured DIP credit facility provided by certain of the Debtors’ existing prepetition lenders;
• Option A/D Equitization Restructuring Transaction: the equitization of approximately $[583 million] in secured note obligations and facility agreement obligations held by Holders of NAC 29 Funded Debt Claims, KfW Funded Debt Claims, and DB Nightjar Funded Debt Claims, in exchange for the issuance of New Ordinary Shares to such Holders, as well as the issuance of the New NAC 29 Debt (comprised of New NAC 29 Notes and/or New NAC 29 Term Loans) to the aforementioned classes’ funded-debt claimants and Holders of SMBC Funded Debt Claims (together with the other restructuring transactions relating to the aforementioned Holders of Claims, collectively, the ‘Option A/D Equitization Restructuring Transaction’);
• Rights Offering: implementation of an approximately $337 million equity rights offering, backstopped by the Backstop Commitment Parties, representing Holders of NAC 29 Funded Debt Claims, KfW Funded Debt Claims, DB Nightjar Funded Debt Claims, and Leveraged Aircraft Lease Claims arising from certain KfW Aircraft Leases, to fund new aircraft investment and provide go-forward liquidity;
• Option C2 Restructuring Transaction: the amendment and restatement of that certain prepetition term loan credit agreement, by and among the Reorganized Investec NAC 27 Debtor and the Holders of Investec NAC 27 Funded Debt Claims (together with the other transactions relating to the Investec NAC 27 Debtors and the Holders of Investec NAC 27 Funded Debt Claims, collectively, the ‘Option C2 Restructuring Transaction’);
• Option E Transactions:
• JOLCO Restructuring Transaction: among other things, (i) the consensual rejection of the Leveraged Aircraft Leases of the JOLCO Debtors, (ii) the return of all collateral securing the financing arrangements under which the JOLCO Debtors are obligated (including the surrender and cancellation of the Debtors’ existing shares in the JOLCO Debtors), and (iii) the complete equitization of certain claims (i.e., the ‘A Termination Claims’) against the JOLCO Debtors and issuance of new shares in the JOLCO Debtors to the Holders of A Termination Claims against the JOLCO Debtors or a third-party buyer, coupled with the extinguishment and release of other claims against the JOLCO Debtors (the ‘B Termination Claims’) (together with the other transactions relating to the JOLCO Debtors and the Holders of Claims against the JOLCO Debtors, collectively, the ‘JOLCO Restructuring Transaction’);
• NAC 8 Restructuring Transaction: among other things, (i) the amendment and restatement of that certain prepetition term loan credit agreement, entered into by and among NAC Aviation 8 Limited and the Holders of Investec NAC 8 Senior Funded Debt Claims, (ii) the amendment and restatement of that certain prepetition term loan credit agreement, entered into by and among NAC Aviation 8 Limited and the Holders of Investec NAC 8 Junior Funded Debt Claims, (iii) Interests in NAC Aviation 8 Limited to be issued or transferred to the Investec NAC 8 Buyer, and (iv) the issuance of the NAC 8 Exit Facility, (together with the other transactions relating to the Investec NAC 8 Debtors and the Holders of Investec NAC 8 Funded Debt Claims, collectively, the ‘NAC 8 Restructuring Transaction’);
• NAC 33/34 Transactions: the recapitalization of the NAC 33/34 Debtors through the New Money Investment Transaction, which will result in the transfer of the share collateral in such Debtors to a new holding company, 90 percent of which will be indirectly owned by Azorra Aviation Holdings, LLC and/or its affiliates as the New Money Investors and 10 percent of which will be owned by the NAC 33/34 Lenders, among other things, which are more fully described herein and in the Plan;
• EDC Exiting Restructuring Transactions: among other things, (i) the servicing and remarketing of twelve CRJ aircraft to effectuate a consensual termination of the leasing and redelivery of such aircraft from Garuda and, to the extent not effectuated, the sale of such aircraft to a third party or the abandonment and transfer of such aircraft to the nominee of the lenders to the EDC Debtors, and (ii) the servicing of six additional EDC-financed CRJ aircraft in compromise of the Debtors’ outstanding prepetition debt in respect of those aircraft, among other things (collectively, the ‘EDC Exiting Restructuring Transactions’);
• EDC Reinstating Transactions: the amendment and restatement of the EDC Remaining Facilities entered into by and between the EDC Debtors and the Holders of EDC Remaining Facilities Claims (collectively, the ‘EDC Reinstating Restructuring Transaction’); and
• Exit Facility: entry into a $200 million super senior revolving credit facility, fully underwritten by holders of Holders of NAC 29 Funded Debt Claims, KfW Funded Debt Claims, SMBC Funded Debt Claims, DB Nightjar Funded Debt Claims, and Leveraged Aircraft Lease Claims arising from certain KfW Aircraft Leases or, at the Debtors’ election, and subject to certain conditions, an alternative exit facility.”

Implementing the transactions contemplated by the Restructuring Support Agreement and Plan will deleverage the Company’s capital structure, preserve the going-concern value of the Debtors’ businesses, maximize recoveries available to all constituents, provide for an equitable distribution to the Debtors’ stakeholders, and preserve the jobs of the Company’s employees.

The formulation of the RSA and Plan is a significant achievement for the Debtors in the face of an historic, depressed operating environment precipitated by a once-in-a-century Pandemic. 

Given the Debtors’ core strengths, including their modern fleet, highly-skilled workforce, global reach, and successful operating track record, the Debtors are confident they can efficiently implement the restructuring set forth in the Plan to ensure their long-term viability and success.

The following is a summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Plan and/or Disclosure Statement):

Claims Against All Debtors (other than NAC 33/34 Debtors and the Moelis/Weil/NRF Exiting Debtors)

• Class A1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. 
• Class A2 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. 
• Class A3 (“Section 510(b) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan.

Intercompany Claims Against / Intercompany Interests in All Debtors (other than the NAC 33/34 Debtors and the Moelis/Weil/NRF Exiting Debtors)

• Class B1 (“Intercompany Claims Against All Debtors other than the NAC 33/34 Debtors and the Moelis/Weil/NRF Exiting Debtors”) is unimpaired impaired, deemed to accept/reject and not entitled to vote on the Plan.
• Class B2 (“Intercompany Interests in All Debtors other than the NAC 33/34 Debtors, the Moelis/Weil/NRF Exiting Debtors, the Investec NAC 27 Debtor, the EDC Debtors, and the Other NAC Debtors”) unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan.

Claims Against / Interests in NAC DAC

• Class C1 (“NAC DAC Unsecured Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive, at the option of such Holder, its Pro Rata share of the NAC DAC Unsecured Funded Debt Claims Recovery Pool, either: (i) in Cash; or (ii) as a Pro Rata share of the NAC DAC Unsecured Funded Debt Claims New Ordinary Shares Allocation; in each case, on the date falling on the later of (i) thirty (30) Business Days after the Applicable Effective Date and (ii) the date on which distributions are made under the Plan; provided, that, notwithstanding the foregoing option, (x) Option A/D Holders shall receive such Pro Rata share of the NAC DAC Unsecured Funded Debt Claims Recovery Pool as a Pro Rata share of the NAC DAC Unsecured Funded Debt Claims New Ordinary Shares Allocation, and (y) Option E Holders shall receive such Pro Rata share of the NAC DAC Unsecured Funded Debt Claims Recovery Pool in cash; provided, further, that, to the extent the NAC DAC Unsecured Funded Debt Claims New Ordinary Shares Allocation equals 5.00% of the New Ordinary Shares (prior to consummation of the Rights Offering (including issuance of the Backstop Shares), payment of the Rights Offering Premiums, and implementation of the Management Incentive Plan), any remaining balance of the Pro Rata share of the NAC DAC Unsecured Funded Debt Claims Recovery Pool that is payable to Holders electing the NAC DAC Unsecured Funded Debt Claims New Ordinary Shares Allocation shall be paid in Cash to such Holders electing the NAC DAC Unsecured Funded Debt Claims New Ordinary Shares Allocation on a pro rata basis.
• Class C2 (“General Unsecured Claims Against NAC DAC”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class C3 (“Interests in NAC DAC”) is impaired, deemed to reject and not entitled to vote on the Plan.

Claims Against NAC 29 Debtors

• Class D1 (“NAC 29 Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive: (i) its Pro Rata share of the Initial New NAC 29 Debt; provided that each Holder of an Allowed NAC 29 Funded Debt Claim shall have the option, in its sole discretion, to elect (such election to be made on the duly submitted ballot setting forth such Holder’s vote on the Plan) to receive either New NAC 29 Notes or New NAC 29 Term Loan Facility Loans (but not both). If a Holder of an Allowed NAC 29 Funded Debt Claim on account of the USPP Notes does not make such an election, such Holder shall receive its Pro Rata share of the Initial New NAC 29 Debt in the form of New NAC 29 Notes. If a Holder of an Allowed NAC 29 Funded Debt Claim under a NAC 29 Facilities Agreement does not make such an election, such Holder shall receive its Pro Rata share of the Initial New NAC 29 Debt in the form of New NAC 29 Term Loan Facility Loans; (ii) its Pro Rata share of the NAC 29 New Ordinary Shares Allocation, subject to dilution by the Rights Offering Shares (including, for the avoidance of doubt, the Backstop Shares), the Rights Offering Premiums, and the Management Incentive Plan; (iii) its Pro Rata share of the subscription rights to the NAC 29 Rights Offering Allocation; (iv) its NAC 29 Exit Facility Participation Right; (v) with respect to Holders of NAC 29 Funded Debt Claims that are not Rights Offering Participants, its Pro Rata share of the Residual Shares (if any), up to the level of such Holder’s Allocable Restricted Cash (provided that, for the avoidance of doubt, any such distributions of Residual Shares shall reduce the Allocable Restricted Cash to be paid to such Holder in an amount equal to the subscription price payable in respect of such Residual Shares (which subscription price shall be paid by NAC 29 and/or NAC 36 to the Reorganized Parent on behalf of such Holder)); and (vi) its Allocable Restricted Cash; provided that the pro rata share of Allocable Restricted Cash in respect of a Holder of an Allowed NAC 29 Funded Debt Claim that is a Rights Offering Commitment Party shall be applied in accordance with the Backstop Agreement; provided, further that, the pro rata share of Allocable Restricted Cash distributed to all Holders of NAC 29 Funded Debt Claims shall be decreased by (a) any Rights Offering Entitlements that have been subscribed for by the relevant Holder in respect of such NAC 29 Funded Debt Claims and (b) the subscription price (calculated at the Plan Equity Value) of any Residual Shares that are distributed to such Holders in the event of an Equity Issuance Shortfall; provided, further that the distribution of Allocable Restricted Cash (if any) shall reduce the amount of each applicable Holder’s NAC 29 Funded Debt Claims on a dollar-for-dollar basis. For the avoidance of doubt, all such Pro Rata amounts shall be allocated before taking into account any debt pay down using Restricted Cash.
• Class D2 (“General Unsecured Claims Against the NAC 29 Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against KfW Debtors

• Class E1 (“KfW Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata Share of the RoG Equitization Recovery. On the Plan Effective Date, the Applicable Share Collateral securing the KfW Funded Debt Claims shall be contributed to NAC 29.
• Class E2 (“General Unsecured Claims Against the KfW Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against DB Nightjar Debtors

• Class F1 (“DB Nightjar Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of the RoG Equitization Recovery. On the Plan Effective Date, the Applicable Share Collateral securing the DB Nightjar Funded Debt Claims shall be contributed to NAC 29.
• Class F2 (“General Unsecured Claims Against the DB Nightjar Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against SMBC Debtor

• Class G1 (“SMBC Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of RoG New NAC 29 Debt equal to the full amount of its Allowed SMBC Funded Debt Claim. On the Plan Effective Date, the Applicable Share Collateral securing the SMBC Funded Debt Claims shall be contributed to NAC 29.
• Class G2 (“General Unsecured Claims Against the SMBC Debtor”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against / Interests in Investec NAC 27 Debtor

• Class H1 (“Investec NAC 27 Funded Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive: (i) its Pro Rata share of Investec NAC 27 Amended & Restated Loans; and (ii) its rights with respect to the Settlement Amount (if any) in accordance with Article IV.T of the Plan and the Moelis/Weil/NRF Amending Creditors Term Sheet.
• Class H2 (“General Unsecured Claims Against the Investec NAC 27 Debtor”) is unimpaired, deemed to accept and not entitled to vote on the Plan. 
• Class H3 (“Interests in the Investec NAC 27 Debtor”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against / Interests in EDC Debtors

• Class I1 (“EDC Funded Debt Claims CRJ”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of the CRJ Facility Exit Recovery Amount, which amount shall be paid in Cash by NAC DAC to the security trustee of the CRJ Facility (on behalf of EDC) on the date falling on the later of (i) thirty (30) Business Days after the Plan Effective Date, and (ii) the date on which distributions are made under the Plan.
• Class I2 (“EDC Funded Debt Claims G6000”) is impaired and entitled to vote on the Plan. Each Holder shall receive its pro rata share of the G6000 Exit Recovery Amount, which amount shall be paid in Cash by NAC DAC to the security trustee of the G6000 Facility (on behalf of EDC) on the date falling on the later of (i) thirty (30) Business Days after the Plan Effective Date, and (ii) the date on which distributions are made under the Plan.
• Class I3 (“EDC Remaining Facilities Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive its pro rata share of the Amended and Restated EDC Debt.
• Class I4 (“General Unsecured Claims Against the EDC Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class I5 (“Interests in the EDC Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against ECA Debtors

• Class J1 (“Leveraged Aircraft Lease Claims Against the ECA Debtors”) is impaired and entitled to vote on the Plan. Each Holder shall receive, unless otherwise agreed between the Debtors and the Holder of such Leveraged Aircraft Lease Claim, the collateral securing its Allowed Leveraged Aircraft Lease Claim in accordance with the rights and priorities set forth in the applicable prepetition financing documents.
• Class J2 (“General Unsecured Claims Against the ECA Debtors”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of the Liquidation Recovery.

Claims Against Kirk Debtors

• Class K1 (“Kirk Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive such treatment to be agreed by the Company and the Majority Consenting Equitizing Creditors.
• Class K2 (“General Unsecured Claims Against the Kirk Debtors”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of the Liquidation Recovery.

Claims Against NYL Debtors

• Class L1 (“NYL Debt Claims”) is impaired and entitled to vote on the Plan. Each Holder shall receive such treatment as is agreed by the Debtors, the Majority Consenting Equitizing Creditors, and the Holder of such NYL Debt Claim, or otherwise such treatment as is sufficient to satisfy section 1129(b)(2)(A) of the Bankruptcy Code.
• Class L2 (“General Unsecured Claims Against the NYL Debtors”) is impaired and entitled to vote on the Plan. Each Holder shall receive its Pro Rata share of the Liquidation Recovery.

Claims Against / Interests in Other NAC Debtors

• Class M1 (“General Unsecured Claims against the Other NAC Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class M2 (“Interests in the Other NAC Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.

Claims Against / Interests in All Moelis/Weil/NRF Exiting Debtors

• Class N1 (“Other Secured Claims Against the Moelis/Weil/NRF Exiting Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class N2 (“Other Priority Claims Against the Moelis/Weil/NRF Exiting Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan. 
• Class N3 (“Intercompany Claims in all Moelis/Weil/NRF Exiting Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan.
•  Class N4 (“Intercompany Interests in all Moelis/Weil/NRF Exiting Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan.

Claims Against / Interests in DB JOLCO Debtors

• Class O1 (“A Termination Claims against DB JOLCO Debtors”) is impaired and entitled to vote on the Plan. Treatment: All A Termination Claims against the DB JOLCO Debtors shall be extinguished (without prejudice to any security granted by any JOLCO Debtor in relation thereto and any ongoing obligations of any JOLCO Debtor under the Moelis/Weil/NRF Exiting Creditors Term Sheet and the applicable Interim Bailment Agreement(s)) and each DB JOLCO Lender, on account of its Allowed A Termination Claim against a DB JOLCO Debtor, shall receive: (i) its Pro Rata share of 100% of the New Equity in such Reorganized DB JOLCO Debtor, to be issued or transferred to the DB JOLCO Buyer in accordance with the DB JOLCO Lender Exit Term Sheet, the Settlement and Transfer Agreement, and the Moelis/Weil/NRF Exit Documents; (ii) if applicable, its Pro Rata share of the JOLCO New Profit Participating Notes issued by such Reorganized DB JOLCO Debtor; (iii) if applicable, participation rights in the JOLCO New RCF Facility; and (iv) its Pro Rata share of the Lock-Box Payment (if any) to be paid in accordance with Article IV.S of the Plan and the Moelis/Weil/NRF Exiting Creditors Term Sheet.
• Class O2 (“B Termination Claims against DB JOLCO Debtors”) is impaired and entitled to vote on the Plan. Treatment: All B Termination Claims shall be extinguished and all rights of Holders of Allowed B Termination Claims shall be relinquished in any collateral that is the subject of security granted by any JOLCO Debtor in relation to the B Termination Claims (but without prejudice to the continuing rights of the DB JOLCO Lenders in respect of such collateral) and each Holder of an Allowed B Termination Claim shall receive its Pro Rata share of the Liquidation Recovery
• Class O3 (“General Unsecured Claims Against the DB JOLCO Debtors”) is impaired and entitled to Vote on the Plan. Holder shall receive its Pro Rata share of the Liquidation Recovery.
• Class O4 (“Interests in the DB JOLCO Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan.

Claims Against / Interests in MUFG JOLCO Debtors

• Class P1 (“A Termination Claims against MUFG JOLCO Debtors”) is impaired and entitled to vote on the Plan. Treatment: All A Termination Claims shall be extinguished (without prejudice to any security granted by any JOLCO Debtor in relation thereto and any ongoing obligations of any JOLCO Debtor under the Moelis/Weil/NRF Exiting Creditors Term Sheet and the applicable Interim Bailment Agreement(s)) and each MUFG JOLCO Lender, on account of its Allowed A Termination Claim against a MUFG JOLCO Debtor, shall receive: (i) its Pro Rata share of 100% of the New Equity in such Reorganized MUFG JOLCO Debtor, to be issued or transferred to the MUFG JOLCO Buyer in accordance with the MUFG JOLCO Lender Exit Term Sheet, the Settlement and Transfer Agreement, and the Moelis/Weil/NRF Exit Documents; (ii) if applicable, its Pro Rata share of the JOLCO New Profit Participating Notes issued by such Reorganized MUFG JOLCO Debtor; (iii) if applicable, participation rights in the JOLCO New RCF Facility; and (iv) its Pro Rata share of the Lock-Box Payment (if any) to be paid in accordance with Article IV.S of the Plan and the Moelis/Weil/NRF Exiting Creditors Term Sheet.
•  Class P2 (“B Termination Claims against MUFG JOLCO Debtors”) is impaired and entitled to vote on the Plan. Treatment: All B Termination Claims against the MUFG JOLCO Debtors shall be extinguished and all rights of Holders of Allowed B Termination Claims against the MUFG JOLCO Debtors shall be relinquished in any collateral that is the subject of security granted by any JOLCO Debtor in relation to the B Termination Claims against the MUFG JOLCO Debtors (but without prejudice to the continuing rights of the MUFG JOLCO Lenders in respect of such collateral) and each Holder of an Allowed B Termination Claim against the MUFG JOLCO Debtors shall receive its Pro Rata share of the Liquidation Recovery.
• Class P3 (“General Unsecured Claims Against the MUFG JOLCO Debtors”) is impaired and entitled to vote on the Plan. Holder shall receive its Pro Rata share of the Liquidation Recovery.
• Class P4 (“Interests in the MUFG JOLCO Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan.

Claims Against / Interests in Investec NAC 8 Debtors

• Class Q1 (“Investec NAC 8 Senior Funded Debt Claims”) is impaired and entitled to vote on the Plan. Holder shall receive: (i) its Pro Rata share of the Investec NAC 8 Amended & Restated Senior Loans; (ii) its Pro Rata share of the Investec NAC 8 New Senior Profit Participating Notes; (iii) (together with the Holders of Allowed Investec NAC 8 Junior Funded Debt Claims) its Pro Rata share of the Investec NAC 8 New Junior Profit Participating Notes; (iv) its Pro Rata share of 100% of the Interests in the Reorganized Investec NAC 8 Debtors, to be issued or transferred to the Investec NAC 8 Buyer in accordance with the NAC 8 Lender Exit Term Sheet, the Settlement and Transfer Agreement, and the Moelis/Weil/NRF Exit Documents; (v) its Investec NAC 8 Exit Facility Participation Right; and (vi) its Pro Rata share of the Lock-Box Payment (if any) to be paid in accordance with the Article IV.S of the Plan and the Moelis/Weil/NRF Exiting Creditors Term Sheet.
• Class Q2 (“Investec NAC 8 Junior Funded Debt Claims”) is impaired and entitled to vote on the Plan. Holdder shall receive: (i) its Pro Rata share of the Investec NAC 8 Amended & Reinstated Junior Loans; (ii) (together with Holders of Allowed Investec NAC 8 Senior Funded Debt Claims) its Pro Rata share of the Investec NAC 8 New Junior Profit Participating Notes; and (iii) its Investec NAC 8 Exit Facility Participation Right.
• Class Q3 (“General Unsecured Claims Against the Investec NAC 8 Debtors”) is impaired and entitled to vote on the Plan. Holder shall receive its Pro Rata share of the NAC 8 General Unsecured Claims Recovery Pool.
• Class Q4 (“Interests in the Investec NAC 8 Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan.

Claims Against / Interests in NAC 33/34 Debtors

• Class R1 (“Other Secured Claims Against the NAC 33/34 Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class R2 (“Other Priority Claims Against the NAC 33/34 Debtors”) is unimpaired, deemed to accept and not entitled to vote on the Plan.
• Class R3 (“NAC 33/34 Loan Claims”)  is impaired and entitled to vote on the Plan.  Each Holder of an Allowed NAC 33/34 Loan Claim shall receive: (i) the New Money Investment Transaction LCF Rights; (ii) its Pro Rata share of the NAC 33/34 Take-Back Debt; and (iii) its Pro Rata share of 10% of New NAC 33.34 HoldCo Interests.
• Class R4 (“General Unsecured Claims Against the NAC 33/34 Debtors”) is impaired and entitled to vote on the Plan. Each Holder of an Allowed General Unsecured Claim against any of the NAC 33/34 Debtors (which, for the avoidance of doubt, shall not include any claims in respect of liabilities owing to any Debtor) shall receive Cash in an amount equal to its Pro Rata share of the NAC 33/34 General Unsecured Recovery Cash Pool Amount.
• Class R5 (“NAC 33/34 Intercompany Claims”) is impaired, deemed to reject and not entitled to vote on the Plan. 
• Class R6 (“Intercompany Claims Between NAC 33/34 Debtors”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan.
• Class R7 (“Section 510(b) Claims”) is impaired, deemed to reject and not entitled to vote on the Plan.
• Class R8 (“NAC 33/34 Intercompany Interests”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan.
• Class R9 (“Interests in the NAC 33/34 Debtors”) is impaired, deemed to reject and not entitled to vote on the Plan. 

Proposed Key Dates

• Disclosure Statement Objection Deadline: March 3, 2022
• Disclosure Statement Hearing Date: March 10, 2022
• Deadline to File Plan Supplement: March 31, 2022
• Voting Deadline: April 7, 2022
• Deadline to Object to Plan Confirmation: April 12, 2022
• Confirmation Hearing: April 19, 2022

Key Documents

The Disclosure Statement [Docket No. 187] attached the following documents:

• Exhibit A: Plan of Reorganization
• Exhibit B: Restructuring Support Agreement
• Exhibit C: Corporate Organization Chart
• Exhibit D: Disclosure Statement Order
• Exhibit E: Rights Offering Procedures (to be filed)
• Exhibit F: Liquidation Analysis (to be filed)
• Exhibit G: Financial Projections (to be filed)
• Exhibit H: Valuation Analysis (to be filed)

Events Leading to the Chapter 11 Filing

In a declaration in support of the Chapter 11 filing (the “Bickle Declaration”), Justin Bickle, the Debtors’ chief executive officer, detailed the events leading to Nordic Aviation’s Chapter 11 filing. The Bickle Declaration provides: “COVID-19 and the resultant shelter-in-place orders to stop its spread halted consumer and business travel overnight. Struggling airlines were forced to ground entire fleets and furlough or lay off thousands of employees….

COVID-19’s effect on the business led to a net loss of $639 million over NAC’s 2019-2020 fiscal year and a net loss of $2.4 billion over NAC’s 2020-2021 fiscal year. NAC’s customers are facing severe liquidity issues, and, simply put, NAC cannot collect cash that its customers do not have. To date, NAC has restructured the lease obligations of thirteen customers on ninety-five aircraft leases. NAC is currently involved in negotiations with fourteen additional customers to restructure the obligations on another 105 leases.

Further, since the last fiscal year, the book value of NAC’s fleet decreased from almost $7 billion to $4.8 billion—more than a thirty percent decrease in value. Significantly, aircraft values are a key factor in rent calculations between NAC and its customers and, despite management’s best efforts, this decrease resulted in lower rental income for new leases. Additionally, this decrease caused the loan-to-value ratio of NAC’s aircraft to rise rapidly and equity value in NAC to decrease significantly.

With an ever-increasing vaccination rate and government-imposed capacity restrictions slowly lifting, the last few months have shown promising signs of recovery, albeit with recent uncertainties caused by the Omicron variant. Airline CEOs are optimistic that there will be a recovery of business travel sparked by pent-up demand after not being able to visit customers although the exact timing remains opaque. In the summer months of 2021, NAC experienced a strong pick-up in placement activity, including delivering fourteen aircraft across all regions, improving on 2019 figures by over fifty percent. Additionally, in fiscal year 2020-2021, NAC’s lease extensions increased forty-five percent. Still, demand for air travel remains unpredictable as countries grapple with the highly contagious Omicron and Delta variants and continuously reevaluate their health and safety protocols….”

Post-Scheme Engagement With Creditors

Following the implementation of the Scheme, NAC continued to actively report to its lenders. On March 29, 2021, with the Cash Sweep due to occur on May 17, 2021, NAC, through its advisors, approached lenders (most of whom were still organized from the Scheme negotiations) to request a forbearance of any remedies relating to a failure to make the Cash Sweep.

Concurrently with the forbearance discussions, NAC initiated discussions with the lenders to work toward a comprehensive resolution to its capital structure. To facilitate such discussions, lenders were granted access to management and the Board to discuss the business plan and responses to the current business environment. To date, NAC has responded to more than 519 diligence requests.

On May 16, 2021, NAC and its creditors executed the Forbearance Agreement. The Forbearance Agreement created a stable platform for NAC to continue engaging with stakeholders to reach a global resolution. Under the terms of the Forbearance Agreement, all principal amortization, maturity payments and Cash Sweep payments were deferred until July 31, 2021, preserving NAC’s liquidity. The Forbearance Agreement included three milestones to provide a clear timeline to ensure that the parties timely made sufficient progress, the first of which was the June 15, 2021 deadline to have a commercial term sheet agreed by two-thirds of NAC’s creditors (the 'Initial Milestone').

Despite active engagement with its creditor groups, NAC was unable to meet the Initial Milestone. As a result, beginning on June 15, 2021, NAC’s major creditor groups had the right to terminate the Forbearance Agreement. Ultimately, in August 2021, Norddeutsche Landesbank Girozentrale ('Nord LB') exercised its right to terminate the Forbearance Agreement with respect to itself and exercised its share charge over the shares in NAC Aviation 9 Limited, which owned five planes. Following the share enforcement, an Irish liquidator was appointed, and NAC Aviation 9 Limited is in the process of being liquidated. The Forbearance Agreement remained in place through December 17, 2021.

During the forbearance period, NAC and its advisors made substantial progress on the terms of a comprehensive and consensual restructuring transaction, as memorialized in the RSA.”

DIP Financing

On January 13, 2022, the Court hearing the Nordic Aviation Capital Designated Activity cases issued an interim order authorizing the Debtors to (i) access $60.0mn of new money debtor-in-possession (“DIP”) financing on an interim basis (the “Initial DIP Term Loans”) and (ii) use cash collateral [Docket No. 171].

The DIP financing is part of a total of $170.0mn of DIP financing being provided by certain prepetition secured creditors and which is to come in three tranches: (i) $60.0mn of Initial DIP Term Loans now available, (ii) a delayed draw of $60.0mn (the “Delayed Draw DIP Term Loans”) and (iii) a final delayed draw of $50.0mn (the “Final Delayed Draw DIP Term Loans”). The balance of the DIP financing is to be made available upon the issuance of a final DIP order, with consideration of that order now scheduled for February 3, 2022.

Central to the DIP financing is the silo-ing of individual borrowers with those individual entities receiving funding on a needs basis, with borrowings flowing down through the topco borrower NAC DAC (at least as to those silos where prepetition lenders have consented to priming liens in favor of the DIP facility or where there is no prepetition debt) and NAC DAC serving as guarantor.  With $137.0mn of unrestricted cash on hand, the Final [$50.0mn of] Delayed Draw DIP Term Loans are there "if needed."

Prepetition Indebtedness

As of the Petition Date, the Debtors have approximately $6.3 billion in outstanding Total Claims and $5.9 billion in total funded debt obligations, approximately $5.4 billion of which are secured obligations. NAC’s prepetition funded debt is comprised of loans under thirty-nine financing facilities provided by eighty-three lenders. Currently, NAC DAC’s ultimate equity holders are: EQT’s Turbo Holding Guernsey Limited (39.94%); GIC’s Raffles Private Holdings Limited (34.05%); and Axiom Partners 10 Ltd (26.02%).

About the Debtors

According to the Debtors: “NAC provides leasing and lease management services to airlines and aircraft investors worldwide. For 30 years NAC's team of industry experts have been providing flexible, customized and competitive aviation solutions to airlines globally. We are very passionate about regional aviation. Our commitment, agility and expertise in delivering the right aircraft for our customers’ needs has enabled us to grow and maintain our position at the heart of regional aviation.”

Corporate Structure Chart (see Docket No. 6, page 287)

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