Walkers, the international financial services firm, has advised on a unique financing transaction for leading Brazilian airline Azul backed by collateral including its loyalty programme and brand intellectual property.

Acting as Cayman legal advisors to Citigroup, the lead dealer manager, Walkers helped deliver an $862 million landmark transaction involving both the exchange of existing notes and issuance of new money notes, setting a new precedent for loyalty financing. It is the first transaction of this kind backed by loyalty programme collateral completed by a non-US airline.

"We are delighted to have been chosen by Citigroup to advise on this ground-breaking and complex structured loyalty financing not previously seen in the market," said Sarah Humpleby, partner in Walkers' Asset Finance group.

"It presented unique challenges with separate pools of shared collateral and complex intercreditor arrangements. This transaction was of critical importance to Azul and the overall success of its wider restructuring plan."

Citigroup was advised by Davis Polk and Azul was advised by Shearman & Sterling.

The Walkers team included Sarah Humpleby, Philip Paschalides, Barnaby Gowrie, Lucy Frew, Brett Basdeo, Benjamin Twidle, Hannah Hawkins, Alexandra Franklin, and Kulraj Badhesha from the firm's Asset Finance, Regulatory & Risk Advisory and Insolvency & Dispute Resolution practices.