LONDON (Reuters) -Holiday company TUI AG said on Friday it was raising up to 400 million euros through an issuance of convertible bonds, to improve its liquidity and help pay down debt taken on to survive the pandemic.

Germany-based TUI, the world’s largest holiday company, has secured multiple bailouts from the German government to ride out the pandemic, and is hoping for a summer pick-up in travel to help repair its balance sheet.

The company said the offering of 350 million euros of senior unsecured bonds due 2028 comes with an option to increase the issuance volume by 50 million euros.

Shares in TUI traded down 7% after the company launched the bond offering.

“The Bonds offer a coupon of between 4.5% and 5.0%, which is not cheap when compared to recent funding rounds by airlines in the travel space,” Goodbody analysts said in a note.

TUI’s net debt has ballooned to 7.2 billion euros during the pandemic and the company needs to start repayments in 2022.

It is counting on a summer holiday rebound, but it has already lowered capacity for July onwards to 75% of 2019’s level from 80% previously.

Britain, which alongside Germany is TUI’s biggest market for holidaymakers, said on Friday it would provide more details on summer trips in early May, but initial plans to require expensive PCR tests for low-risk international travel, left the travel industry reeling.

($1 = 0.8407 euros)

(Reporting by Yadarisa Shabong in Bengaluru and Sarah Young in London; Editing by Shailesh Kuber)