Waypoint starts negotiations with lenders over covenants

news

by Alasdair Whyte

9 September 2018

Waypoint files for Chapter 11

Waypoint Leasing, the largest independent helicopter lessor, is in talks with banks to restructure loans.

The lessor first held talks in June to warn lenders that it could be close to breaching some covenants. Some 26 banks are involved.

Waypoint, like other helicopter lessors, is a victim of the oil downturn that started when the oil price fell in 2014. Oil companies cut costs and renegotiated contracts leading to a sudden drop in demand for helicopters.

Waypoint’s three major shareholders – MSD Capital (Michael Dell’s private investment firm), Soros Fund Management (the private investment firm of George Soros) and private equity firm Cartesian Capital – have also disagreed about whether to invest more equity.

Waypoint has mandated boutique investment bank Houlihan Lokey and law firm Weil Gotshal advise it. The banks have hired restructuring firm Alvarez & Marshall and law firm Millbank to advise them.

Waypoint’s largest customer was CHC which was hit hard when it returned aircraft as part as of its Chapter 11 restructuring. However, CHC’s restructuring also highlighted the technical and regulatory complexities involved with managing aircraft returns and moving helicopters to other operators and missions. No bank has the expertise to do this.

Waypoint’s shareholders had hoped to sell part of the leasing company to China’s CMI in 2017, but the deal fell through.

The shareholders hired Hooman Yazhari as CEO in February 2018. He moved from CHC Helicopters where he was general counsel and chief administration officer and heavily involved in the operator’s Chapter 11 restructuring. At the same time Ed Washecka, Waypoint’s founding CEO, Clark McGinn, senior vice president of sales, and Robert Van de Vuurst, external general counsel, left Waypoint.

Waypoint Leasing did not wish to answer questions from Helicopter Investor about its restructuring.

Waypoint Leasing’s capital market transactions

Borrower: Waypoint Leasing
Date: 5 September 2017
Size: $87.5 million
Arranger: Sumitomo Mitsui Banking Corporation (SMBC)

Borrower: Waypoint Leasing
Date: 19 April 2016
Size: $100 million
Structure: Secured loan
Term: Six years
Notes:Can be drawn in dollars, euros and sterling. Used to refinance aircraft Waypoint’s revolving credit facility and aircraft being delivered in 2016 and 2017.

Borrower: Waypoint Leasing
Date: October 2015
Structure: Unsecured revolving credit facility increase
Lenders: Deutsche Bank and Goldman Sachs & Co (existing lead arrangers SunTrust Robinson Humphrey and MUFG Union)

Borrower: Waypoint Leasing
Date: September 2015
Size: $200 million
Structure: senior secured notes
Joint placement agents: Goldman Sachs and SunTrust Robinson Humphrey
Senior co-placement agent: Mitsubishi UFJ Securities
Co-placement agents: Deutsche Bank, BNP Paribas and RBC Capital Markets
Notes: Three tranches: $125 million, $50 million and $45 million. Seven year average life. Can draw-down in dollars and Euros.

Borrower: Waypoint Leasing
Date: April 2015
Size: $60 million
Structure: unsecured loan
Lead arrangers: SunTrust Robinson Humphrey and MUFG Union Bank

Borrower: Waypoint Leasing
Date: March 2015
Size: $85 million loan
Lead arranger: Deutsche Bank

Borrower: Waypoint Leasing
Date: April 2015
Size: $40 million increase to $300 million Term Loan
Lead arranger: BNP Paribas, MUFG Union Bank, RBC Capital Markets and Wells Fargo Securities.

Borrower: Waypoint Leasing
Date: September 2014
Size: $300 million revolver (can be expanded to $400 million)
Lead arrangers: BNP Paribas, MUFG Union Bank, RBC Capital Markets and Wells Fargo Securities
Lenders: Lombard, Sumitomo Mitsui Banking Corporation, Everbank Commercial Finance, Capital One, National Association

Borrower: Waypoint Leasing
Date: June 2014
Size: $133 million extension to November facility (option to expand to $550 million)
Lenders: Barclays Bank, Citi, RBC Capital Markets, Lombard

Borrower: Waypoint Leasing
Date: May 2014
Size: $72.5 million five-year term loan
Lead arranger: Goldman Sachs

Borrower: Waypoint Leasing
Date: November 2013
Size: $335 million revolver
Joint bookrunner and agent: Credit Suisse
Joint bookrunners: SunTrust Robinson Humphrey, CIT Finance
Lenders: Goldman Sachs, Union Bank., Fifth Third Bank and 1st Source Bank.