GOLLBZ 8 7/8 01/24/22

GOL Linhas Aereas Inteligentes SA

Credit, Industrial/Transportation


Presented:01/18/2017
Price:R$N/A
Cap:N/A
Current Price:R$1.08
Cap:$0.15B

Presented

Date01/18/2017
PriceR$N/A
Market CapN/A
Ent ValueN/A
P/E RatioN/A
Book ValueN/A
Div Yield0%
Shares O/SN/A
Ave Daily VolN/A
Short IntN/A

Current

PriceR$1.08
Market Cap$0.15B

Public companies mentioned herein: GOL Airlines (GOLL BZ), Smiles (SMLE3 BZ), LATAM (LFL) and Delta Airlines (DAL).

Highlights

A distressed Brazilian airline, the presenter sees GOL Airlines as having a fundamentally misunderstood and mispriced capital structure. The company is the largest airline in Brazil, and the only publicly traded airline operator in the country. GOL has approximately $600 million in unsecured debt across 3 separate issues. While he believes all the bonds appear cheap at current levels, the presenter is recommending the 8.875% bond due in 2022, which effectively creates the business at about 5 times forward EBITDA. Currently trading in the high 60s largely due to ongoing macro weakness in Brazil, the presenter believes the bond will ultimately trade to par. A performing credit despite its distressed pricing, it has a one year return profile of 40-45 percent. The presenter expects various positive catalysts to play out over the next 6-12 months, with investors getting paid a 13% current yield while they wait.

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Idea Discussion

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