After a bailout by the government to rescue the company from the hit it faced because of the Covid-19 pandemic, the German airline Lufthansa made use of a corporate bond sale on Wednesday to raise as much as 1 billion euros ($1.2 billion), the company said.
The Covid-19 pandemic induced travel restrictions that includes countries shutting down borders to prevent the spread of the pandemic had hit the global airline industry very hard including Lufthansa and this hut and an abrupt halt in cash flow had forced the German airline to raise money in February this year through the issuance of bonds for repaying a part of the 9 billion euro bailout it was given by the state lender last year.
"The repeated successful placement of a corporate bond again confirms our access to a variety of advantageous financing instruments," the company’s finance chief Remco Steenbergen said in a statement.
There were reports earlier last week about the company set to issue three and eight-year bonds which were confirmed by the company in the statement on Wednesday. The reports had cited information from a memo from a lead manager on the deal.
Lufthansa became the latest of a number of major airlines to approach the debt markets to raise money for survival.
Lufthansa said that the a part of the bonds issued by that has a term until 2024 comes with an interest of 2.0 per cent per year, while another part of the bonds promises an interest of 3.5 per cent and is slated to mature in 2029.
The bonds that had a shorter maturity time period received demand of over 900 million euros while the bonds with the longer maturity periods caw demand worth one 1 billion, said reports.
With the roll out of Covid-19 vaccines signalling support for a brighter economic outlook and better prospects for the global travel sector, bonds have been sold to raise money already this year by a number of peers of the German airline including Air France-KLM, easyJet, British Airways owner IAG and Ryanair.
The funds generated from the bond sale will be used for strengthening the liquidity of the company, Lufthansa said. According to previous reports, Citi, Credit Suisse, HSBC and ING managed the transaction.
There were reports in the media in May about Lufthansa getting in touch with investors about a capital increase worth roughly 3 billion euros and were looking at either a June/July or September/October window. That was after the company’s shareholders approved a potential increase of up to 5.5 billion.
Preparations for a share sale were underway, the company said on Wednesday, and added that no decision on the size and timing had been taken yet.
(Source:www.reuters.com)
The Covid-19 pandemic induced travel restrictions that includes countries shutting down borders to prevent the spread of the pandemic had hit the global airline industry very hard including Lufthansa and this hut and an abrupt halt in cash flow had forced the German airline to raise money in February this year through the issuance of bonds for repaying a part of the 9 billion euro bailout it was given by the state lender last year.
"The repeated successful placement of a corporate bond again confirms our access to a variety of advantageous financing instruments," the company’s finance chief Remco Steenbergen said in a statement.
There were reports earlier last week about the company set to issue three and eight-year bonds which were confirmed by the company in the statement on Wednesday. The reports had cited information from a memo from a lead manager on the deal.
Lufthansa became the latest of a number of major airlines to approach the debt markets to raise money for survival.
Lufthansa said that the a part of the bonds issued by that has a term until 2024 comes with an interest of 2.0 per cent per year, while another part of the bonds promises an interest of 3.5 per cent and is slated to mature in 2029.
The bonds that had a shorter maturity time period received demand of over 900 million euros while the bonds with the longer maturity periods caw demand worth one 1 billion, said reports.
With the roll out of Covid-19 vaccines signalling support for a brighter economic outlook and better prospects for the global travel sector, bonds have been sold to raise money already this year by a number of peers of the German airline including Air France-KLM, easyJet, British Airways owner IAG and Ryanair.
The funds generated from the bond sale will be used for strengthening the liquidity of the company, Lufthansa said. According to previous reports, Citi, Credit Suisse, HSBC and ING managed the transaction.
There were reports in the media in May about Lufthansa getting in touch with investors about a capital increase worth roughly 3 billion euros and were looking at either a June/July or September/October window. That was after the company’s shareholders approved a potential increase of up to 5.5 billion.
Preparations for a share sale were underway, the company said on Wednesday, and added that no decision on the size and timing had been taken yet.
(Source:www.reuters.com)
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