Santiago, December 3, 2024 – LATAM Airlines Group signed the first “Sustainability-Linked Loan” in its history for a total of US$300 million, thus becoming the only airline in South America to have carried out a financial operation of this kind so far.

The agreement signed with Credit Agricole Corporate & Investment Banking and BNP Paribas corresponds to a revolving credit line that allows LATAM to access additional long-term financing under special conditions in its interest rates if a series of sustainability goals are met.

The new banking commitment is acquired in a favorable context for LATAM, which, after its return to the New York Stock Exchange and the symbolic “Bell Ringing Ceremony”, reported a net profit of US$301 million in the third quarter of the year, accumulating US$705 million in net profits between January and September 2024.

“We continue to add to the good news. This is our first financial product associated with sustainability and we see it as a first step to continue exploring other similar instruments in the future, such as sustainability-linked bonds. This milestone not only reinforces the commitment to being a more sustainable group, hand in hand with the strategy and actions focused on climate change, circular economy, and shared value, but also allows LATAM to be a pioneer in promoting sustainability-related finance in the aviation sector in the region,” said Andrés del Valle, VP Corporate Finance of LATAM Airlines Group.

It should be noted that the loan is a refinancing of an existing engine facility (“Spare Engine Facility” or “SEF”), which has been part of LATAM’s capital structure for the last decade. The refinancing enabled a significant reduction in the interest rate, as well as an optimization of the line’s collateral- that is, reducing the number of engines pledged as collateral – and extending its duration into the future.

The transaction includes sustainability-linked provisions where LATAM may receive pricing adjustments based on its performance against carbon emission intensity of operations, measured as tons of CO2 emissions / revenues per ton-kilometer (RTK).  This inaugural sustainable finance transaction supports the company’s strategy, particularly the group’s goal of achieving net-zero emissions by 2050.

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