Lufthansa to raise $1.2 billion from junk bond markets

By Abhinav Ramnarayan LONDON (Reuters) - Lufthansa is set to raise 1 billion euros ($1.2 billion) through its first conventional bond issue since the onset of the coronavirus crisis, a lead manager said. The German airline operator's five-year bond was set to be priced on Tuesday at a yield of 3.125% after demand totalling more than 4.25 billion euros, the lead manager told Reuters. After the pandemic first swept through Europe, Lufthansa needed a 9 billion euro German government bailout

Reuters November 25, 2020 00:06:51 IST
Lufthansa to raise $1.2 billion from junk bond markets

Lufthansa to raise 12 billion from junk bond markets

By Abhinav Ramnarayan

LONDON (Reuters) - Lufthansa is set to raise 1 billion euros ($1.2 billion) through its first conventional bond issue since the onset of the coronavirus crisis, a lead manager said.

The German airline operator's five-year bond was set to be priced on Tuesday at a yield of 3.125% after demand totalling more than 4.25 billion euros, the lead manager told Reuters.

After the pandemic first swept through Europe, Lufthansa needed a 9 billion euro German government bailout.

Its return to the conventional bond markets adds to the 600 million euros that Lufthansa raised through a convertible bond issue this month.

The two deals cement Lufthansa's access to markets and ability to raise working capital after the crisis, which has crippled airlines and the global travel sector.

Lufthansa lost its investment grade and is now firmly in so-called junk territory, with a BB- rating from S&P Global and Ba2 from Moody's.

However, low-rated debt in Europe has been supported by unprecedented monetary stimulus from the European Central Bank and recent news of potential vaccines against COVID-19 has also boosted demand for riskier assets such as junk-rated bonds.

(Reporting by Abhinav Ramnarayan; Editing by Yoruk Bahceli and Alexander Smith)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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