Brazil's BNDES prepares emergency financing for airlines

Reuters has reported BNDES, a Brazilian development bank is working to gain emergency financing for airlines in April and could extend a lifeline to other companies needing both capital and liquidity during the coronavirus pandemic, the company said.

The bank president said the BNDES plans to finance the airlines via convertible debentures at low interest rates to help cover the cost of operations.

Brazilian airline Azul SA rose by almost 15% on the news while rival Gol soared 14% in early trading in São Paulo.

Santiago-listed Latam Airlines group was up almost 8% at one point in the morning, although all three later trimmed the initial gains.

The financing should not be used to repay debt, the BNDES president said, as airlines and creditors will be expected to negotiate new terms and longer repayment schedules.

BNDES is also lining up USD 7.8 billion of financing to help small and mid-sized companies cover payroll costs. Montezano said that financing should be ready by the first week of May.