Deutsche Lufthansa AG has again successfully issued a bond with a total volume of €1 billion. The bond, with a denomination of €100,000 was placed in two tranches, with a term of three and eight years, respectively, and a volume of €500 million each.
On Wednesday (July 7, 2021), The Lufthansa Group announced an additional successful bond issue on the capital market with a total volume of €1 billion. The bond, with a denomination of €100,000 was placed in two tranches with a volume of €500 million each. The first tranche has a term of three years and bears 2.0 percent interest annually, while the second tranche, due 2029, bears an interest rate of 3.5 percent per year. With the placement of an earlier bond last February, the Group has already secured the refinancing of all liabilities due in 2021 and repaid their €1B KfW loan ahead of schedule. The additional funds from the latest bond issue will further strengthen the Group’s liquidity as we enter the post-pandemic period.
In Wednesday’s announcement, Deutsche Lufthansa AG’s Chief Financial Officer, Remco Steenbergen, said,
“The repeated successful placement of a corporate bond again confirms our access to a variety of advantageous financing instruments. The two tranches over three and eight years fit perfectly into our maturity profile. In addition, we can obtain financing on the capital market at more favorable terms compared with the stabilization measures. We are continuing to work systematically on our restructuring measures in order to repay the government stabilization measures as quickly as possible.”
As of March 31, 2021, the Lufthansa Group had cash and cash equivalents totaling €10.6 billion, including uncalled funds from stabilization packages from Germany, Switzerland, Austria and Belgium. At that time, only €2.5 billion of €9 billion in stabilization funds had been used. In addition to the most recent bond issue, the Group is preparing for a capital increase, with net proceeds to be used in part to repay stabilization measures from the German Economic stabilization Fund (ESF), and to restore a sustainable and long-term capital structure. A decision on the size and timing of a possible capital increase has not yet been determined by the company’s Executive and Supervisory Boards, and would also require ESF approval.
Source: Deutsche Lufthansa AG