Lufthansa Raises €1bn In Corporate Bond Sale; Planning To Reactivate Nearly All Of Its Routes By September
German airline Lufthansa has raised €1 billion in a corporate bond sale, boosting its finances after a state bail-out due to the COVID-19 pandemic.
Lufthansa, which was hit hard by the ensuing tourism crisis, had already issued a bond in February to repay part of last year's €9 billion bailout from state lender KfW.
"The repeated successful placement of a corporate bond again confirms our access to a variety of advantageous financing instruments," finance chief Remco Steenbergen said in a statement.
The company said that it issued three and eight-year bonds, confirming an earlier Reuters report that cited a memo from a lead manager on the deal, becoming the latest of several major airlines to tap the debt markets.
The tranche with a term until 2024 bears interest of 2.0% per year, while it's 3.5% for the tranche maturing in 2029, Lufthansa said.
The shorter-dated tranche received demand of over €900 million and the longer one €1 billion, according to the memo.
Among Lufthansa's peers, Air France-KLM, easyJet , British Airways owner IAG and Ryanair have all sold bonds this year as COVID-19 vaccinations have supported a brighter economic outlook and better prospects for the travel sector.
Lufthansa said that it will use the proceeds to strengthen its liquidity. Citi, Credit Suisse, HSBC and ING managed the transaction, according to an earlier memo.
Reuters reported earlier this year that Lufthansa was sounding out investors about a capital increase worth approximately €3 billion, looking at either a June/July or September/October window, after shareholders approved a potential increase of up to €5.5 billion.
The company said this week that preparations for a share sale are underway, adding that no decision on the size and timing has been taken.
Planning To Reactivate Nearly All Of Its Routes By September
Additionally, Lufthansa is planning to reactivate nearly all of its routes by late summer, Capital magazine has cited the head of the airline's network management as saying.
"We have decided to operate nearly all routes by September to have a fully-fledged offer for personal and business travellers," Heiko Reitz was quoted as saying.