Air France-KLM Secures €500 Million through Hybrid Bond Offering
Air France-KLM Successfully Issues New Hybrid Bonds
Air France-KLM recently announced a significant milestone by successfully issuing hybrid bonds worth €500 million. These bonds are expected to provide the company with enhanced financial flexibility and make a strong statement in the financial markets.
Details of the Hybrid Bonds
The hybrid bonds carry a fixed annual coupon rate of 5.75%, with the yield estimated at 5.875% until the first reset date. These bonds are undated and categorized as deeply subordinated, allowing them to qualify for 50% equity credit as per ratings from Fitch and S&P. Both agencies have confirmed the company's long-term issuer rating at BBB- and BB+, reflecting a stable outlook.
Market Reception and Confidence
The issuance was met with enthusiastic market response, as the order book surpassed €1.75 billion, indicating an oversubscription rate of 3.5 times. This robust interest highlights the strong trust investors have in Air France-KLM's strategy and the resilience of its credit profile. Investors are increasingly recognizing the company's ability to recover and grow in a competitive environment.
Utilization of Proceeds
Air France-KLM plans to allocate the net proceeds effectively, primarily for general corporate purposes. This may include refinancing existing subordinated instruments within the group's structure. By doing so, the company aims to streamline its balance sheet and optimize its cost of financing, thereby enhancing its operational efficiency.
Future Prospects and Trading Admissions
The company intends to apply for the hybrid bonds to be traded on Euronext Paris, further strengthening its position in the European capital markets. This strategic step signifies Air France-KLM's commitment to engaging with investors and effectively managing its financial resources.
Contact Information for Investor Relations
For inquiries related to this issuance and other investor-related matters, Air France-KLM has made key contacts available:
Michiel Klinkers
Marouane Mami
Email: [email protected]
Email: [email protected]
Conclusion
This bond issuance not only underscores Air France-KLM’s solid credit framework but also illustrates the airline’s proactive measures to manage its financial structure. The response from the investment community affirms confidence in the firm’s future outlook and strategic initiatives.
Frequently Asked Questions
What is the total amount raised through the hybrid bond issuance?
Air France-KLM raised €500 million through the successful issuance of hybrid bonds.
What is the coupon rate for the newly issued hybrid bonds?
The bonds have a fixed annual coupon rate of 5.75% until their first reset date.
Why were the hybrid bonds well-received in the market?
The issuance attracted an order book exceeding €1.75 billion, showcasing strong investor confidence in Air France-KLM's strategy and credit profile.
How will the proceeds from the hybrid bonds be used?
Proceeds will be utilized for general corporate purposes, including potential refinancing of existing subordinated instruments.
Where will the hybrid bonds be traded?
An application will be made for the hybrid bonds to be admitted to trading on Euronext Paris.
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