Airfinance Journal Awards North American Deal of the Year to Seabury Group for Northwest Airlines Restructuring

2007 – a good year for EETCs (Air Finance Journal)

FEBRUARY 2008- The market might be going through uncertain times, but innovation remains high, as this year's Airfinance Journal Deals of the Year awards will testify.

Two types of deals dominated the market in 2007: those that were lucky enough to close in a bullish market and those that came up against the fall out of the sub-prime collapse.

Apart from timing, each deal awarded this year is unique in its own right, which would explain the new categories. The expanded Deals of the Year awards show that, despite the poor market conditions, the market's capacity for innovation is high. This bodes well for a challenging market.

Northwest's emergence from bankruptcy in 2007 was executed brilliantly and merits recognition. The airline moved out of Chapter 11 bankruptcy on May 31 with one of the largest equity raises in history. Seabury Group acted as financial adviser to Northwest, while JP Morgan acted as underwriter for the $750 million deal.

Northwest's treasury team did a fantastic job restructuring the company's finances. The most spectacular element of the deal was raising more than $750 million in liquidity on the same day the company emerged from bankruptcy.

The deal closed just before turbulence began to affect capital markets pricing. The airline's treasury team took advantage of aggressive markets during the first half of 2007.

Moreover, the airline was able to retain cash when it completed an enhanced equipment trust certificate to fund 27 regional aircraft in October. The resulting liquidity from the rights offering will give Northwest more financial freedom in 2008.

The offering provided Northwest with liquidity to ensure funding. In 2006 the airline was very keen to raise cash to help fund Chapter 11 restructuring. The company structured a 24-month debtor-in-possession (DIP) facility secured by its established Pacific routes and created a two-year DIP facility, comprised of a $250 million revolver and a $975 million term loan that can convert into a five-year senior secured exit facility.

Seabury Group acted as financial adviser to the airline during the process of the rights offering.

John Luth, Seabury's president and chief executive officer, says: "The Northwest structuring was highly successful and demonstrates a comprehensive approach to a refinancing."

Contact: Karen C. Cook
Director of Communications
kcook@seaburygroup.com
+1 212 475 8132