Sky Money
Finnair, Icelandair Close Sale-And-Leasebacks
- EasyJet completed its £1.2 billion ($1.6 billion) rights issue with 93 percent of the new 301 million new shares subscribed by close on September 28. The balance will be purchased by underwriters BNP Paribas, Credit Suisse, Goldman Sachs, Santander and Société Générale. “The success of this capital raise … will enable EasyJet to strengthen its balance sheet and accelerate its post-Covid 19 recovery plan,” said CEO Johan Lundgren. The airline will use proceeds to bolster its balance sheet and fund a broad expansion plan that aims to build on its strong strategic positions in Western Europe’s slot-controlled airports.
- Finnair closed a $400 million sale-and-leaseback transaction with GE Capital Aviation Services and Pacific Investment Management Company for four Airbus A350s with 2017-2019 vintages. Proceeds from the deal will refinance existing debt and allow the airline to retire its €175 million ($204 million) undrawn revolving credit facility. Finnair Chief Financial Officer Mika Stirkkinen called the deal the largest “single aircraft financing transaction in the history of our company.”
- Icelandair has financed its last three Boeing 737 Max jets under a sale-and-leaseback transaction with Aviation Capital Group. The deal covers two 737-8s and one 737-9 due in December and January 2022. Icelandair will operate 12 737 Maxes with the final three deliveries.
- Latam Airlines Group has accepted a proposal from Oaktree Capital and Apollo Management for an additional $750 million in debtor-in-possession financing as part of its U.S. Chapter 11 bankruptcy restructuring. Chief Financial Officer Ramiro Alfonsín said the terms will generate “significant cost savings” for the group as it works towards exiting bankruptcy. The Tranche B funds are priced at either either 700 basis points over Libor or 600 basis points over an alternate base rate if interest is paid in cash quarterly; or 750 basis points over Libor or 650 basis points over an alternate rate if interest is capitalized and paid at maturity. The debt matures in April 2022 subject to Latam’s exit from Chapter 11.