TOP NEWS: IAG offers EUR800 million bonds amid travel uncertainty

(Alliance News) - International Consolidated Airlines Group SA on Tuesday launched large a ...

Alliance News 11 May, 2021 | 8:26AM
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(Alliance News) - International Consolidated Airlines Group SA on Tuesday launched large a convertible bond offering amid ongoing uncertainty over air travel.

The British Airways parent is offered EUR800.0 million of senior unsecured bonds, due 2028 and convertible into shares. The final terms of the bonds are expected to be determined and announced later Tuesday, and settlement is expected to take place on or about Tuesday next week.

The bonds will bear a fixed rate of interest payable semi-annually in arrears which will be determined as part of the bookbuilding process. The conversion price of the bonds is expected to be set at a premium of between 45% and 50% to the volume weighted average price of the IAG shares in the period from launch to pricing, translated into EUR.

"Given the continuing uncertainty in respect of air travel, the net proceeds from the offering will be used by IAG to strengthen the group's balance sheet and increase the group's overall liquidity position and provide the group with increased operational and strategic flexibility to take advantage of a recovery in demand," the company said.

The offering comes after disappointment over the UK government's plans to reopen the travel industry. On Friday evening, Westminster revealed that Portugal, Gibraltar and Israel are among just 12 destinations on England's new 'green list' for travel, meaning visitors do not need to self-isolate on their return home.

Industry leaders said the government's approach represented an "excess of caution" and demanded greater clarity over the formation of the green list.

IAG shares were trading 4.6% lower in London on Tuesday morning at 200.25 pence each.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
International Consolidated Airlines Group SA 198.72 GBX -0.79

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