Milbank LLP’s Capital Markets and Transportation and Space teams across Singapore and New York represented the investors on a milestone US$443 million revenue bond issued on August 23, 2024. The revenue bonds comprised US$243 million in Tranche A Bonds and US$200 million in Tranche B Bonds which are cleared through Euroclear/Clearstream. The revenue bonds were issued by a newly incorporated Labuan subsidiary of AirAsia Berhad and secured against, amongst other collateral, the future revenue of AirAsia Berhad received from certain flight routes. The revenue bonds are also guaranteed by AirAsia Berhad and Capital A Berhad (the ultimate parent of AirAsia Berhad). The Tranche A Bonds were issued to a group of six leading aircraft lessors to refinance outstanding lease liabilities owing as a result of the Covid-19 pandemic, whilst the new capital received from the issuance of the Tranche B Bonds to the private credit funds will be used to finance the return to service of certain aircraft which have remained grounded since the pandemic. This transaction is not only an integral part of Air Asia Berhad’s ongoing capital restructuring plan, which includes its aim of exiting its current PN17 status, but represents a novel fund-raising structure for an airline in the Asia Pacific market. The Milbank team was led by Corporate Finance and Securities partner Giles Kennedy in Singapore and included partner Terry O’Donnell and associate Andre Seah. The transaction was supported by New York partner Drew Fine and Singapore-based senior associate David Paterson, both members of the firm’s Transportation and Space Group.