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By Yoruk Bahceli
May 18 (Reuters) - Ryanair will raise 1.2 billion
euros ($1.5 billion) from a five-year bond sale later on
Tuesday, memos from two lead managers seen by Reuters showed, as
the company takes advantage of favourable terms to bolster its
finances.
Ryanair on Monday posted a record annual loss for the year
ending in March as a result of travel restrictions linked to the
pandemic.
The company will price the bonds at 120 basis points over
the mid-swap level, equivalent to a yield of around 0.98%,
Reuters calculations found, from 150 basis points when the sale
started earlier on Tuesday following demand of 5 billion euros,
the memos showed.
It will be issued by the group's main airline Ryanair DAC.
As concerns persist about how successfully the pandemic is
being controlled, European travel companies including EasyJet
, TUI Cruises and IAG have sold bonds to add
cash to their balance sheets or refinance debt.
Ryanair's group Chief Executive Michael O'Leary said on
Monday the company has almost zero visibility for the rest of
the year even though it saw a "dramatic spring-back in bookings"
in recent weeks.
Ryanair will use the proceeds of the bond sale for general
corporate purposes, an investor presentation seen by Reuters
said.
The presentation highlighted that Ryanair also has an 850
million euro bond maturing this June and 600 million pounds
($851.52 million) of borrowing under the Bank of England's COVID
Corporate Financing Facility maturing in March 2022.
Ryanair said on Monday it already had sufficient funds to
repay the upcoming bond maturity, but the bond sale was
opportunistic.
"We've now gone cash positive, having been previously been
cash negative," O'Leary said on the results call.
"Nevertheless, we do see an opportunity there...
capitalising on the very favourable recovery story that I think
is now apparent, but also with the very favourable financing
rates and terms that were available out there," he said.
Ryanair hired BNP Paribas, Citigroup and Commerzbank for the
sale on Monday, a previous memo said.
($1 = 0.8192 euros)
($1 = 0.7046 pounds)
(Reporting by Yoruk Bahceli; additional reporting by Conor
Humphries in Dublin
Editing by Rachel Armstrong and Barbara Lewis)
