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EasyJet to raise up to 1.2 billion euros from bond issue

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EasyJet to raise up to 1.2 billion euros from bond issue 1

By Yoruk Bahceli and Abhinav Ramnarayan

AMSTERDAM (Reuters) – EasyJet will raise 1-1.2 billion euros from a seven-year bond sale later on Wednesday, according to memo from a bank arranging the deal seen by Reuters, days after Britain laid out a timeline for a return to international travel.

The deal has received initial investor demand of 4.8 billion euros, according to the lead manager, helping the company cut the yield guidance to around 2.125%, from around 2.375% when the sale started earlier on Wednesday. [L8N2KU2QS]

The positive response from bond investors comes after UK Prime Minister Boris Johnson set out a phased plan on Monday to end England’s COVID-19 lockdown.

Under the plan, Britain — EasyJet’s most important market — could see curbs on international travel removed as early as May 17.

A day after the announcement, it emerged EasyJet had hired BNP Paribas, Morgan Stanley and Santander for a potential bond sale, following a steep rise in bookings.

The airline’s share price has risen 16.55% to 973 pence this week, while the yield on its outstanding June 2025 notes has dropped a hefty 47 basis points to 1.439%. Bond yields move inversely to prices.

Proceeds from the bond sale will be used for general corporate purposes and for refinancing debt, according to an investor announcement. EasyJet has a 500 million euro bond maturing in February 2023.

(Reporting by Yoruk Bahceli, Editing by Abhinav Ramnarayan, Kirsten Donovan)

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