On 14 September 2026, airBaltic voluntarily initiated court-supervised reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Code to restructure its financial obligations. The company targets completing the process by approximately June 2027, subject to court approvals.
To maintain operational liquidity throughout the proceedings, airBaltic secured a commitment for €350 million in debtor-in-possession (DIP) financing, arranged by Strategic Value Partners alongside Barclays, Hayfin, Morgan Stanley, and Oaktree. The financing carries an interest rate of SOFR + 8% (approximately 12%) and will provide operational liquidity subject to U.S. Court approval.
What this means for bondholders:
- Court-supervised restructuring: Chapter 11 is a court-supervised process in which a company's obligations to creditors are addressed under the protection of the court while a long-term Plan of Reorganization is negotiated. The specific treatment of the airBaltic bond within this process has not been confirmed.
- Interaction with August 2026 amendments: The bond amendments approved in August 2026 (including interest capitalization) were agreed prior to this filing. It is not yet confirmed how those terms, including the capitalized principal, will be treated as the Chapter 11 process proceeds, or whether they will be addressed in a future Plan of Reorganization.
Mintos does not have additional details beyond airBaltic's public disclosures at this time. We will update this article as soon as more information becomes available.
Official notice: airBaltic Initiates Chapter 11 Financial Reorganisation