Ryanair roadshow meets keen interest for €3bn bond sale
Published 06/06/2014 | 02:30
Ryanair top brass will complete a roadshow today as the airline pitches its €3bn bond programme to investors.
The roadshow, which began on Tuesday, followed a route that took in investors based in Germany, Switzerland, France, the UK, the Netherlands and Scandinavia.
Ryanair plans to use the money it will raise from the so-called Euro Medium Term Note programme (EMTN) to help finance its purchase of 180 aircraft from Boeing, as well as for other corporate purposes. Under the programme, Ryanair won't have more than €3bn in notes outstanding.
The airline embarked on the roadshow after ratings agencies Fitch, and Standard and Poor's made it the highest-rated airline in the world.
There has been intense interest in the bond offer, with the London roadshow extended to a second day. BNP Paribas, Citigroup and Deutsche Bank have been mandated by Ryanair to handle the bond sale. The notes will be listed on the Irish Stock Exchange.
The bond prospectus warns potential investors that they need to be cognisant of factors that could prevent Ryanair from performing as expected over the next few years.
It cites issues including European Commission and UK probes,.
"Ryanair is facing allegations that it has benefited from unlawful state aid in a number of court cases," it notes.
It also points out that the EC is investigating agreements with a number of other airports to determine whether arrangements the airline has with them constitute illegal state aid.
"Adverse rulings in the above state aid matters could be used as precedents by competitors to challenge Ryanair's agreements with other publicly-owned airports and could cause Ryanair to strongly reconsider its growth strategy," the bond prospectus warns.
It has also cautioned that its labour practices, where most staff work to Irish contracts, have been subject to state scrutiny in some jurisdictions.
"If Ryanair were forced to concede that Irish jurisdiction did not apply to those crew who operate from continental Europe, then it could lead to increased salary, social insurance and pension costs and a potential loss of flexibility," it said.
It also warned that its policy of grounding aircraft during winter could make it difficult to attract staff only interested in year-round employment.