Banks Hike Pricing on Junk Bond Needed for Latam Bankruptcy Exit

Banks leading the bankruptcy exit financing for Latam Airlines Group SA are sweetening the price on $1.5 billion of high-yield bonds amid tepid investor demand.

JPMorgan Chase & Co. is proposing an all-in yield in the range of 14% to 15% on the debt from an initial price talk of around 13%, according to people familiar with the matter. The original issue discount has been lowered to 93 cents on the dollar, according to the people, who asked not to be named discussing private information.

The financing, which also includes a $750 million term loan, will repay the ...