A court in New York has given subpoenas to Etihad Airways (EY, Abu Dhabi Int'l) and Fitch Ratings Inc., as part of its efforts to track down a document at the centre of a feud over USD1.2 billion in bonds issued by the carrier and airlines it partly owned, Reuters reported.

Bondholders are seeking access to the “debt assumption agreement” signed by Etihad and Alitalia (AZ, Rome Fiumicino) in 2016. The Abu Dhabi carrier issued bonds in 2015 and 2016 via special purpose vehicle EA Partners, which then distributed the money to Etihad and other airlines, including Alitalia.

In May 2017, after the Italian flag carrier initiated bankruptcy proceedings, Etihad agreed to cover the debt owed by Alitalia under the debt assumption agreement, according to EA Partners’ filings at the London Stock Exchange and a Fitch Ratings report.

The investors filed a lawsuit with the US District Court for the Southern District of New York on June 16, 2020, a copy of which Reuters viewed on June 26. In it, the bondholders say they assume the document will help them recover some of the money they invested.

The hand-delivered subpoenas ordered Etihad and Fitch offices in New York to disclose the debt agreement, and both have until July 7 to respond or object, according to Reuters.

Asked for comment on the issue, an Etihad spokesperson told Reuters: “Etihad Airways did not issue EA Partners notes but is one of several borrowers from EA Partners.”

As previously reported, in April, a steering committee of debtholders, mostly local and international investment funds, confidentially proposed that the carrier agree to restructure the bonds, which are due in September 2020 and June 2021, sources told the news agency in mid-May. But Etihad did not respond, they added, prompting the legal action.