Saturday 17 March 2018

Ryanair lifts euro bond limit to €5bn to cover jets

Former Ryanair chief financial officer Howard Millar
Former Ryanair chief financial officer Howard Millar
John Mulligan

John Mulligan

Ryanair has expanded its euro bond programme to €5bn from €3bn, as it eyes additional future debt issuances to help finance its significant aircraft orders.

But the airline has no immediate plans to issue any fresh debt under the euro medium term note (EMTN) programme after raising €750m back in February at a coupon, or interest rate, of just over 1pc.

Ryanair launched the €3bn euro bond programme in 2014. It initially sold €850m in a seven-year bond that carried an interest rate of just 1.875pc. The bond was more than eight times over-subscribed.

The airline had originally intended to borrow €500m under that first issue, but the strong level of interest prompted it to raise it to €850m. The global coordinator was Citibank, while the joint book runners were BNP Paribas, Citibank and Deutsche Bank.

At the time, then chief financial officer Howard Millar said there was the potential at a later date to increase the amount Ryanair could raise under the programme to €5bn.

Ryanair has told the Irish Independent that the programme has now expanded to that amount.

Ryanair has issued three euro bonds to date, with a cumulative value of €2.45bn under its EMTN programme.

"Ryanair is well financed for the year," it added.

The airline currently has a fleet of about 400 Boeing aircraft that will grow to about 600 once it receives the last jets under a current order, in 2023.

Ryanair CEO Michael O'Leary was in London yesterday where he held a private meeting with UK transport secretary Chris Grayling.

Mr O'Leary has warned that Ryanair and other airlines might be forced to stop flying between the UK and the European Union for a number of months once Brexit is triggered in 2019 unless a new open skies agreement can be signed between the two jurisdictions by next year.

Mr O'Leary previously said that not selling tickets for its UK flights by the end of next year is the "least desirable outcome" but that it is a potential scenario.

Ryanair will need to know three months before Brexit happens whether or not a new aviation agreement is in place that will enable it to keep operating flights in and out of the UK.

After meeting Mr Grayling yesterday, Mr O'Leary said that the transport secretary is increasingly conscious of the need to finalise an aviation deal with the EU before the end of 2018.

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