Brazil’s TAM Sells US$ 457 Million in Bonds to Finance Expansion

Brazil’s largest airline company, TAM, in a push to finance the expansion of its fleet, has filed a request before the Brazilian CVM (Comissão de Valores Mobiliários), the country’s stock regulator, to issue as much as US$ 1 billion reais (US$ 457 million) in bonds over the next two years.

The Program debentures will be non-share convertible, and issued as subordinated, unsecured or guaranteed debentures.

The São Paulo-based company also submitted the request to conduct its first public distribution of 50,000 debentures for a total amount of R$ 500,000,000.00, with a term of six years counting from the date of issue.

Air travel in Brazil has been growing at a rate of more than 10% a year. TAM needs the money to maintain its growing fleet in the coming years and is taking advantage of more affordable loans being offered by the Brazilian market at the moment.

At the end of last month, the airline announced the purchase of 37 Airbus planes at a cost of US$ 3 billion.

TAM has been the leader in the Brazilian domestic market for more than two years, and held a domestic 47.6% market share and international 37.9% market share at the end of June 2006.

The company operates regular flights to 47 destinations throughout Brazil. It serves 72 different cities in the domestic market through regional alliances.

TAM – www.tam.com.br

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