BermudAir (2T, Bermuda) has deployed an "innovative funding approach" to raise USD1 million via a tokenised bond issuance executed on the Obligate on-chain capital markets platform, saying it is the first airline to use fintech to raise capital. The issue was conducted in conjunction with global digital assets and cryptofinance firm XBTO Group.
"The funding needs of our business are rapidly evolving," said Adam Scott, founder and CEO of BermudAir. “Having this kind of innovative financing in the range of available options works for us. The efficiencies of using fintech to raise capital in this way are self-evident."
The transaction was issued on the public blockchain Polygon, with all payments in USDC, a stablecoin pegged to the US dollar and backed by dollar reserves including cash and US treasuries. The 15-month bond offered a 15% p.a. return for investors.
BermudAir is the first airline to leverage cryptofinance capabilities with XBTO and Obligate to raise capital in the new tokenised credit markets, with XBTO acting as lead arranger and bookrunner.
Securing its air operator's certificate (AOC) in August 2023, BermudAir has scaled up to service five US airports, Baltimore International, Fort Lauderdale International, Orlando International, White Plains, and Boston. It is soon to add Halifax and Toronto Pearson to the network. The carrier operates a pair of E170s. Shortly after its launch, the airline dropped plans to be a business-class-only operator, describing the decision to start offering economy seating as "a strategic shift" in response to "evolving market dynamics."
Scott said the debt financing offers an opportunity to diversify BermudAir's capital management strategy. The capital will fund operational and resource enhancements for the airline, including route expansion, to cater to growing demand and consolidate its position in new markets.
