EasyJet has raised €1.2 billion from a seven-year bond sale, in a sign of investor confidence in a recovery in international travel and tourism.
The deal attracted investor demand of €5.8 billion, a lead manager announcement seen by Reuters said, helping the company to reduce the yield on offer to 2% from approximately 2.375% when the sale first started on Wednesday February 24.
The deal came at the top end of a €1.0 billion to €1.2 billion target range.
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The positive response from bond investors came after British Prime Minister Boris Johnson set out a phased plan on to end England's COVID-19 lockdown.
Under the plan, Britain could see curbs on international travel removed as early as May 17.
Encouraged by positive news about travel in its biggest market, Britain, easyJet moved to appoint BNP Paribas, Morgan Stanley and Santander as joint bookrunners on Tuesday February 23 to run a bond sale.
EasyJet said that bookings for flights for this summer have soared more than 300% since Britain's announcement, and holidays by more than 600%, compared to their levels last week.
The airline's share price has risen more than 18% to 982 pence this week, while the yield on its outstanding June 2025 notes has dropped by 51 basis points in two sessions to 1.39% . Bond yields move inversely to prices.
General Corporate Purposes And Refinancing Debt
Proceeds from the bond sale will be used for general corporate purposes and for refinancing debt, according to an investor announcement. EasyJet has a €500 million bond maturing in February of 2023.