- Abu Dhabis Etihad Airways and seven equity partners raise $500m in a bond issuance
- The five-year bonds have a coupon rate of 6.875 per cent
UPDATE: Etihad Airways Partners raised an additional $200m through a tap bond, according to Reuters on 17 September, taking the total issuance to $700m. In a tap bond, subscription is reopened with identical conditions.
Abu Dhabis Etihad Airways and seven equity partners have issued $500m of bonds.
The five-year bonds were priced at a coupon rate of 6.875 per cent on 16 September.
Earlier reports claimed that Etihad Airways was planning to raise $1bn.
The funds raised by a special-purpose vehicle will be split across the eight entities involved. The distribution is: 20 per cent each to Etihad Airways, Etihad Airport Services, Germanys Airberlin and Italys Alitalia; 16 per cent to Indias Jet Airways; and the remaining 4 per cent to Air Serbia and Air Seychelles.
The funds will be used for capital expenditure and investment in fleets, as well refinancing, depending on each airlines needs.
Airlines are looking to diversify their sources of funding for aircraft acquisition as major US manufacturer Boeing is no longer able to access export credit due to US Exim Banks lapse in authorisation.
A key element of our equity partner strategy is creating a total that is greater than the sum of its parts, a grouping that can work together to improve revenues, reduce costs and uncover exciting new business synergies, said James Hogan, president and CEO of Etihad Airways in a press release.
We have already been able to identify significant opportunities together, whether that be in shared IT [information technology] platforms, joint fleet procurement or shared training costs. Commercial fund-raising is no different.
The joint lead book-running managers were New Yorks Goldman Sachs, the local ADS Securities and Luxemborgs Anoa Capital.