LATAM Airlines Group S.A. Announces Commencement Of Cash Tender Offer And Consent Solicitation For 9.50% Senior Guaranteed Notes Due 2020 Of TAM Capital 2 Inc.

OREANDA-NEWS. May 22, 2015. LATAM Airlines Group S.A., its affiliates, ("LATAM Airlines Group" or the "Company") (NYSE: LFL / IPSA: LAN / Bovespa: LATM33), TAM Capital 2 Inc. (the "Issuer") and Citigroup Global Markets Inc. (the "Offeror" or the "Dealer Manager") today announced the commencement of an offer by the Offeror to purchase for cash (the "Tender Offer") any and all of the outstanding 9.50% Senior Guaranteed Notes due 2020 (the "Notes") of the Issuer. The Tender Offer is being made by the Offeror on behalf of LATAM and the Issuer pursuant to the offer to purchase and consent solicitation statement dated May 21, 2015 (the "Tender Offer and Consent Solicitation Statement") and the related letter of transmittal and consent (the "Letter of Transmittal" and, together with the Tender Offer and Consent Solicitation Statement, the "Offer Documents"). The principal purpose of the Tender Offer is to acquire all the outstanding Notes and the principal purpose of the Consent Solicitation (as defined below) is to eliminate substantially all of the restrictive covenants and certain events of default contained in the Indenture (as defined below).

In connection with the Tender Offer, the Issuer is also soliciting (the "Consent Solicitation"), with respect to the Notes, consents (the "Consents") to (i) amendments to the indenture, dated October 29, 2009 (as amended and supplemented to the date hereof, the "Indenture"), among the Issuer, TAM S.A. ("TAM S.A.") and TAM Linhas A?reas S.A. ("TAM Linhas" and, together with TAM S.A., the "Guarantors"), as guarantors, The Bank of New York Mellon, as trustee, registrar, transfer agent and principal paying agent (the "Trustee"), and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg transfer agent (the "Luxembourg Transfer Agent"), under which the Notes were issued, which would eliminate most of the covenants, eliminate certain events of default applicable to the Notes, eliminate or amend certain other provisions contained in the Indenture and the Notes and shorten the minimum period in which the Issuer is required to give notice to holders of a redemption from 30 days to five Business Days prior to a redemption date (the "Majority Consent Amendments") and (ii) an amendment to the Indenture, which would eliminate the "Limitations on the Company" covenant (the "Two-Thirds Consent Amendments", and together with the Majority Consent Amendments, the "Proposed Amendments"). If the Proposed Amendments become operative, any Notes remaining outstanding after that date will no longer be entitled to the benefit of substantially all of the restrictive covenants and certain of the events of default contained in the Indenture.

The Issuer currently intends to redeem the Notes that remain outstanding following the Early Settlement Date at a cash redemption price per \\$1,000 principal amount of the Notes equal to \\$1,047.50, plus accrued and unpaid interest to the redemption date. However, the Issuer is under no obligation to do so, and may elect not to do so on that date, or at all.

The table below summarizes certain payment terms for the Notes:

(1) Per U.S.\\$1,000 principal amount of Notes.
(2) Excludes accrued interest, which will be paid in addition to the Tender Offer Consideration or the Total Consideration, as applicable.

The Tender Offer and Consent Solicitation will expire at 11:59 P.M., New York City time, on June 18, 2015, unless extended or earlier terminated (such date and time, including as extended or earlier terminated, the "Expiration Date"). Holders of Notes who validly tender (and do not validly withdraw) their Notes at or prior to 5:00 P.M., New York City time, on June 4, 2015, unless extended or earlier terminated (such date and time, including as extended or earlier terminated, the "Early Tender Date"), will be eligible to receive the Total Consideration (as defined below), which includes the Early Tender Payment (as defined below), plus accrued interest to the date of payment. Holders of Notes who validly tender Notes after the Early Tender Date but at or prior to the Expiration Date in the manner described herein will not be eligible to receive the Early Tender Payment and will therefore only be eligible to receive the Tender Offer Consideration (as defined below), plus accrued interest to the date of payment. Notes that have been validly tendered pursuant to the Tender Offer may be validly withdrawn prior to the Early Tender Date but not thereafter except as may be required by applicable law.

The "Total Consideration" for each U.S.\\$1,000 principal amount of Notes validly tendered (and not validly withdrawn) at or prior to the Early Tender Date and accepted for purchase pursuant to the Tender Offer will be U.S.\\$1,053.00, which includes an early tender payment equal to U.S.\\$30.00 (the "Early Tender Payment"), and Holders of such Notes will be eligible to receive the Total Consideration within three business days following the Early Tender Date (the "Early Settlement Date"). Holders of Notes who validly tender Notes after the Early Tender Date but at or prior to the Expiration Date and whose Notes are accepted for purchase will not be entitled to receive the Early Tender Payment and will therefore be entitled to receive, for each U.S.\\$1,000 principal amount of Notes accepted for purchase, U.S.\\$1,023.00 (the "Tender Offer Consideration").

The Offeror intends to accept for purchase on the settlement date that is expected to be within three business days following the Expiration Date or as promptly as practicable thereafter (the "Final Settlement Date"), all Notes validly tendered (and not validly withdrawn) at or prior to the Expiration Date. 

Adoption of the Majority Consent Amendments requires the written consent of the Holders of at least a majority of the principal amount of the outstanding Notes (the "Majority Consents") and adoption of the Two-Thirds Consent Amendments requires the consent of not less than 66 2/3% of the aggregate principal amount of the Notes (the "Two-Thirds Consent" and, together with the Majority Consents, the "Requisite Consents"). The Offeror will only accept Notes for purchase if Consents representing at least a majority of the principal amount of the outstanding Notes to authorize the Proposed Amendments are validly delivered and not validly revoked. Assuming that Consents representing at least a majority of the principal amount of the outstanding Notes (excluding any Notes owned by the Issuer or its affiliates) are validly delivered and not validly revoked, the Issuer, the Guarantors and the Trustee will execute a supplemental indenture with respect to the Indenture (the "Supplemental Indenture") providing for the Proposed Amendments.  The Supplemental Indenture will become effective upon its execution and delivery by the Issuer, the Guarantors and the Trustee, but will provide that the Proposed Amendments will not become operative until the Offeror accepts for purchase in the Tender Offer at least a majority (in the case of the Majority Consent Amendments), or not less than 66 2/3% (in the case of the Two-Thirds Consent Amendments), in principal amount of the outstanding Notes (excluding any Notes owned by the Issuer or its affiliates), and the Exchange (as defined below) is consummated.

Holders may not tender their Notes without delivering their Consents to the Proposed Amendments and to the execution and delivery of the Supplemental Indenture pursuant to the Consent Solicitation and may not deliver Consents to the Proposed Amendments and the execution and delivery of the Supplemental Indenture without tendering their Notes pursuant to the Tender Offer.  Holders that validly tender their Notes pursuant to the Tender Offer will be considered to have validly delivered their Consents.

The Issuer and LATAM have consented to the Offeror making the Tender Offer and the Consent Solicitation. It is intended that the Notes purchased by the Offeror in the Tender Offer will be exchanged by the Offeror with LATAM for certain new notes (the "Exchange") issued in a new offering by LATAM (the "New Offering").

The obligation of the Offeror to accept for purchase, and to pay for, Notes validly tendered pursuant to the Tender Offer is subject to, and conditioned upon, the satisfaction or waiver of certain conditions as set forth in the Offer Documents, in the sole discretion of the Offeror, including consummation of the New Offering in terms satisfactory to LATAM and receipt by the Offeror of valid tender (that are not withdrawn) of a majority of the outstanding Notes.

The Information Agent and Tender Agent for the Tender Offer and Consent Solicitation is Global Bondholder Services Corporation. To contact the Information Agent and Tender Agent, banks and brokers may call +1-212-430-3774, and others may call U.S. toll-free: 866-470-3900. The Information Agent and Tender Agent's email is contact@gbsc-usa.com.

Any questions or requests for assistance may be directed to the Dealer Manager at its respective telephone numbers set forth below or, if by any Holder, to such Holder's broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Tender Offer and Consent Solicitation.

The Sole Dealer Manager for the Tender Offer is:

This notice does not constitute or form part of any offer or invitation to purchase, or any solicitation of any offer to sell, the Notes or any other securities in the United States or any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor. This notice is also not a solicitation of any Consent to the Proposed Amendments. The Tender Offer and Consent Solicitation are made only by and pursuant to the terms of the Tender Offer and Consent Solicitation Statement and the related Letter of Transmittal and the information in this notice is qualified by reference to the Tender Offer and Consent Solicitation Statement and the related Letter of Transmittal. None of the Offeror, the Issuer, LATAM or the Information Agent and Tender Agent makes any recommendations as to whether holders should tender their Notes pursuant to the Tender Offer and deliver their Consents pursuant to the Consent Solicitation.

This notice to the market does not represent an offer to sell securities or a solicitation to buy securities in the United States or in any other country. The New Offering was not and will not be registered under the U.S. Securities Act of 1933 ("Securities Act"), as amended. Consequently, the notes issued in the New Offering are prohibited from being offered or sold in the United States or to U.S. citizens without the applicable registration or exemption from registration required under the Securities Act.

This notice to the market is released for disclosure purposes only, in accordance with applicable legislation. It not does not constitute marketing material, and should not be interpreted as advertising an offer to sell or soliciting any offer to buy securities issued by the Issuer, the Guarantors and LATAM. This notice to the market is not for distribution in or into or to any person located or resident in the United States, its territories and possessions, any state of the United States or the District of Columbia or in any jurisdiction where it is unlawful to release, publish or distribute this announcement.

Forward-Looking Statements

This notice includes and references "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may relate to, among other things, LATAM's business strategy, goals and expectations concerning its market position, future operations, margins and profitability.

Although the Issuer and LATAM believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect.

The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and trends to differ materially from those made, projected, or implied in or by the forward-looking statements depending on a variety of uncertainties or other factors.

The Issuer and LATAM undertake no obligation to update any of its forward-looking statements.