UPDATE 3-Ryanair raises 1.2 billion euros in oversubscribed bond sale

(Updates with completion of sale)

By Yoruk Bahceli and Conor Humphries

DUBLIN, May 18 (Reuters) - Ryanair raised 1.2
billion euros ($1.5 billion) at a record low coupon rate in a
five-year bond sale on Tuesday, as Europe's largest low-cost
airline took advantage of favourable market conditions to
bolster its finances.

The sale happened a day after the Irish carrier reported a
record annual loss of 815 million euros as a result of travel
restrictions linked to the coronavirus pandemic. Senior
executives said on Monday that conditions were good to tap
capital markets, though they noted there was no urgent need to
raise funds.

Ryanair had 3.15 billion euros in cash at the end of March
and unencumbered aircraft worth at least 7.3 billion euros,
Chief Financial Officer Neil Sorahan said ahead of the bond
issuance. Ryanair is one of the few airlines that has an
investment-grade credit rating, with a BBB score from both S&P
Global Ratings and Fitch Ratings.

"We are pleased with the success of our latest, low-cost,
unsecured bond issue," Sorahan said in a statement. The sale was
"keenly priced" at a coupon of 0.875%, he added.

It received demand of 5.2 billion euros, according to two
lead managers.

Colm Rainey, head of UK and Ireland corporate debt capital
markets at Citigroup, said the coupon was the lowest ever
achieved by Ryanair in part due to the fact investors are keen
on its management, cost discipline and sheer size and scale.

"Within this sector this is where you place your bets,"
Rainey said.

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.

An investor presentation ahead of the Ryanair sale
highlighted that the airline also has an 850 million euro bond
maturing this June and 600 million pounds of borrowing under the
Bank of England's Covid Corporate Financing Facility maturing in
March 2022.

Ryanair said it had the funds for the repayments and planned
to use the proceeds for general corporate purposes. The company
has reduced the term of its bond offerings to five years since
the start of the pandemic.

Group Chief Executive Michael O'Leary said on Monday that
the airline had decided to tap the markets to capitalise on the
"very favourable recovery story that I think is now apparent"
ahead of the wider reopening of European aviation and very
favourable financing rates.

In a previous memo, Ryanair said it had hired BNP Paribas,
Citigroup and Commerzbank for the sale on Monday.
($1 = 0.8192 euros)
(Additional reporting by Abhinav Ramnarayan; Editing by Rachel
Armstrong, Barbara Lewis and Paul Simao)