(Adds detail, background)
LONDON, March 18 (Reuters) - British Airways-owner IAG
said it planned to raise about 1 billion euros ($1.20
billion) through a bond issue, strengthening its finances to
help it survive the pandemic in case the travel downturn lasts
longer than expected.
Airlines are counting on a travel restart this summer after
a year of minimal income due to restrictions, but rising case
numbers in some countries and delays to the vaccine roll-out in
Europe could derail the recovery.
Last month IAG, which also owns Iberia and Vueling in Spain
and Aer Lingus in Ireland, said it had liquidity to ride out the
crisis, but on Thursday decided to issue two bonds to add to its
war chest.
In its statement, the airline group said the proceeds from
the offering could be used to "withstand a more prolonged
downturn in air travel" or provide "flexibility to take
advantage of a recovery in demand for air travel".
The senior unsecured bonds would be issued in two tranches,
IAG said, with 500 million euros of bonds due in 2025 and
another 500 million euros due in 2029, and final terms due to be
determined shortly.
Settlement is expected to take place on Mar. 25.
IAG has been cutting costs to help it survive while flying
only 20% of its normal capacity. It is burning through about 185
million euros per week.
($1 = 0.8366 euros)
(Reporting by Sarah Young; editing by Costas Pitas and Paul
Sandle)