British Airways inaugural $927 million EETC Bond Issue
International Consolidated Airlines Group, S.A. ("IAG") today announces the successful launch by British Airways of an inaugural $927 million publicly-traded bond issue, using aircraft as collateral. These bonds are known as EETCs, or Enhanced Equipment Trust Certificates, and are a form of aircraft financing commonly used by US airlines.
The transaction includes Class A and Class B Certificates with an underlying collateral pool made up of six new B787-8 aircraft, two new B777-300 ER aircraft and six new A320-200 aircraft, due for delivery between June 2013 and June 2014.
The Class A Certificates ($721.6 million) have an annual coupon, payable quarterly, of 4.625%, and the Class B Certificates ($205.4 million) have an annual coupon, payable quarterly, of 5.625%.
Enrique Dupuy, CFO of IAG said: "This transaction marks a strategic milestone as we diversify our sources of funding. It is also the first time that British Airways has used EETCs and that this form of financing has been used in the UK".
The transaction is rated by Standard and Poor's (A/BBB), Moody's (Baa1/Ba1) and Fitch (A/BBB-).
Citi acted as Lead Structuring Agent and Global Co-ordinator on the transaction.
26 June 2013
Important Notice:
This announcement is not for distribution, directly or indirectly, in or into the United States, Canada or Japan. This announcement is not an offer of securities for sale into the United States, Canada, Japan or elsewhere. The securities described herein are not being registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) unless registered under the Securities Act or pursuant to an exemption from such registration. Any public offering of securities to be made in the United States will be by means of a prospectus that may be obtained from British Airways and will contain detailed information about British Airways and its management, as well as financial statements. There will be no public offer of securities in the United States.
Forward-looking statements:
Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.
Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and International Consolidated Airlines Group S.A. (the 'Group') plans and objectives for future operations, including, without limitation, discussions of the Company's Business Plan, expected future revenues, financing plans and expected expenditures and divestments. All forward-looking statements in this report are based upon information known to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
It is not reasonably possible to itemise all of the many factors and specific events that could cause the Company's forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Further information on the primary risks of the business and the risk management process of the Group is given in the Annual Report and Accounts 2012; these documents are available on www.iagshares.com.
