CHILE: LATAM Airlines Group Announces Liability Management Actions

LATAM announces that TAM Capital 3 Inc., a company controlled by TAM S.A. through its affiliated company TAM Linhas Aereas S.A., and that consolidates its financial statements with LATAM, has announced the redemption of its 8.375% senior unsecured notes due 2021 and issued on June 3, 2011.

- Additionally, LATAM announces the future issuance of approximately US$350 million of unsecured local Chilean notes with maturities in 2022 and 2028.

- These actions will further optimize LATAM's capital structure, lowering its blended cost of debt.

LATAM Airlines Group S.A. and its consolidated affiliates ("LATAM" or "the Company") (NYSE: LTM / IPSA: LTM), today announced that TAM Capital 3 Inc., a company controlled by TAM S.A. through its affiliated company TAM Linhas Aereas S.A., and that consolidates its financial statements with LATAM, has announced the redemption for any and all of its 8.375% Senior Unsecured Notes due June 3, 2021 for a total amount of US$500 million.

Funding for this transaction will be partially sourced from the issuance of approximately US$350 million of unsecured local Chilean-Unidad de Fomento denominated notes with maturities in 2022 and 2028, while the balance will come from other financing activities and from the Company's cash balance.

This liability management transaction will further optimize the capital structure of LATAM, while maintaining its strong cash position.

This represents positive news for LATAM; the transaction will provide financial savings by calling the notes with the highest coupon (8.375%) and will reduce the financial obligations for 2021 by US$500 million while extending the existing debt maturity profile.

Once these transactions are completed, LATAM will have concluded the refinancing process of the TAM legacy bonds issued prior to the business combination between LAN and TAM.

This process started in 2015 with the liability management of the US$500 million, 9.5% senior unsecured notes due 2020 issued by TAM Capital 2 Inc. and more recently with the final payment in April 2017 of the US$ 300 million, 7.375% senior unsecured notes due 2017 issued by TAM Capital Inc.

These transactions will result in a stronger overall balance sheet structure for LATAM.

We will benefit from significant savings and an improved repayment profile, and in combination with other financing initiatives already completed, including the successful issuance of the previously announced US$700 million senior unsecured notes, we are in a much stronger financial position than one year ago, said Ramiro Alfonsín, CFO of LATAM Airlines Group.

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.



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