Lufthansa (LH, Frankfurt International) has boosted its liquidity by raising a further EUR1 billion euros (USD1.19 billion) in a corporate bond sale on July 7, it announced in a statement.
It is the latest in a string of major bond issues among European airlines this year, and the pandemic-struck German carrier had itself already raised EUR1.6 billion (USD1.9 billion) by issuing a bond on February 4, to repay part of last year’s EUR9 billion (USD10.7 billion) bailout.
Five months later, these latest long-term funds raised will be used to further strengthen Lufthansa Group’s finances.
“The repeated successful placement of a corporate bond again confirms our access to a variety of advantageous financing instruments,” Lufthansa’s chief financial officer, Remco Steenbergen, said in the statement.
“In addition, we can obtain financing on the capital markets at more favourable terms compared with the stabilisation measures. We are continuing to work systematically on our restructuring measures in order to repay the government stabilisation measures as quickly as possible,” he added.
The latest bonds were issued with a denomination of EUR100,000 (USD119,000) in two tranches, for three years (at 2% per year) and eight years (at 3.5% per year), each with a volume of EUR500 million (USD595 million).
The shorter tranche attracted demand of over EUR900 million (USD1.07 billion), the longer one EUR1 billion, according to a memo released earlier in the day seen by Reuters.
Lufthansa said in its statement that as of March 31 it had cash and cash equivalents of EUR10.6 billion (USD12.6 billion), including uncalled funds from the bailout packages from Germany, Switzerland, Austria, and Belgium. By that time, it had used around EUR2.5 billion (USD3 billion) of the EUR9 billion.
The company is also continuing to make preparations for a capital increase of between EUR3 billion and EUR5.5 billion (USD3.5-6.5 billion).
