General Industry

Ryanair Lands €850m As European Airline Bonds Begin To Take Off

By Dave Simpson
Ryanair Lands €850m As European Airline Bonds Begin To Take Off

Ryanair has sold an €850 million bond, its first in three years, in a sign that European debt markets are starting to reopen to airlines, which were crippled by the coronavirus crisis.

Investors put in €4.4 billion of orders for the bond, which was more than five times the amount that Ryanair was seeking to raise, a lead manager memo seen by Reuters showed.

Ryanair's balance sheet, which is one of the strongest in the industry with more than €3.9 billion of cash as of June 30, 2020, and aircraft worth approximately €7 billion, was behind investor demand, analysts said.

Ryanair also raised €400 million euros from shareholders last week.

"Ryanair is in a better place, therefore it's going to be easier for it to get the financing it wants," Azhar Hussain, head of global credit at Royal London Asset Management, said.


It is one of three airlines, together with easyJet and Southwest Airlines, that still holds investment grade ratings, ratings agency S&P said in August, noting that all three are low-cost carriers.

S&P said that it considers Ryanair to be one of the financially strongest airlines as it removed its 'BBB' rating - two notches above "junk" status - from 'credit watch' on Monday September 7, making an imminent downgrade less likely.

Ryanair's bond, pricing at a yield of 3%, will pay a coupon of 2.875%, the lead manager said.

That is more than double what Ryanair paid for longer debt in 2017, but a fraction of the yields of more than 12% which its bonds hit in March.

"To me, [Ryanair] says that the door is wide open for deals," Daniel Ender Aizencang, ABN AMRO fixed income strategist, said.



Ryanair, which hired Barclays, BNP Paribas and Citi to manage the sale, will use part of the proceeds to refinance an €850 million bond due in June 2021, a banker who worked on the deal said.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.