by 2 minutes Reuters (Reuters) – On Wednesday, German airline Lufthansa secured 1 billion euros ($1.2 billion) in a corporate bond issue, bolstering its finances following a government bailout due to the COVID-19 outbreak. FILE PHOTO: On June 25, 2020, Lufthansa planes are seen parked on the tarmac of Frankfurt Airport in Germany. REUTERS/File Photo/Kai Pfaffenbach Lufthansa had already issued a bond in February to repay part of last year’s 9 billion euro bailout from state lender KfW, which was heavily hit by the accompanying tourism crisis. In a statement, finance chief Remco Steenbergen stated, “The repeated successful placement of a corporate bond confirms our availability to a number of beneficial financing options.” The company said had sold three and eight-year bonds, confirming a Reuters report that quoted a document from the deal’s lead manager. It’s the latest big airline to enter the debt markets. The tranche with a period until 2024 pays 2.0 percent per year in interest, while the tranche due in 2029 pays 3.5 percent, according to Lufthansa. According to the document, the shorter-dated tranche got demand of over 900 million euros, while the longer-dated tranche received demand of one billion euros. Air France-KLM, easyJet, British Airways owner IAG, and Ryanair, among Lufthansa’s competitors, have also sold bonds this year as COVID-19 vaccinations have contributed to an improved economic outlook and better prospects for the tourism sector. The funds will be used to bolster Lufthansa’s liquidity, according to the company. According to an earlier letter, Citi, Credit Suisse, HSBC, and ING were in charge of the deal. After shareholders authorized a potential increase of up to 5.5 billion euros, Reuters reported in May that Lufthansa was contacting investors about a capital increase worth around 3 billion euros, with a June/July or September/October timeframe in mind. The business stated on Wednesday that it was preparing for a share sale, but that no decision had been made on the size or timeframe. (1 dollar = 0.8481 euro) Yoruk Bahceli contributed reporting; Christoph Steitz contributed further reporting; and John Stonestreet and Mark Potter edited the piece./n
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