Lufthansa issues 750 million euro bond
Posted Date: 03/07/2009
Deutsche Lufthansa AG has successfully placed another benchmark bond, the second this year, on 1 July 2009. With this issue, the Group is acquiring additional liquidity for general corporate financing purposes.
The bond has a volume of 750 million euros and a maturity of seven years. It has a fixed coupon of 6.5 per cent. It was issued at a re-offer price of 99.601 per cent, giving a yield of 6.573 per cent. This corresponds to a mid-swap spread plus 330 basis points. The issue created a buoyant demand, especially among investors from Germany, Italy and Switzerland. In fact, the bond was oversubscribed sevenfold.
Joint bookrunners of the transaction were HSBC, Morgan Stanley, UBS and UniCredit. The bond was floated under the Lufthansa Debt Issuance Programme and is listed on the Luxembourg stock exchange.
The scale of the transaction, as well as the negotiated terms, reflect well the confidence placed in Lufthansa as a borrower. Lufthansa is currently the only European airline with an investment rate grading (S&P’s: BBB negative credit watch; Moody’s: Baa3 negative outlook).
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