IAG to launch bond offer to fund acquisition of Vueling

International Airlines Group (IAG) said it is launching a senior unsecured convertible bond offer of up to 400m euros to fund its acquisition of Spanish carrier Vueling, enhance liquidity and lower its cost of capital.

International Airlines Group (IAG) said it is launching a senior unsecured convertible bond offer of up to 400m euros to fund its acquisition of Spanish carrier Vueling, enhance liquidity and lower its cost of capital.

The bonds can be converted into ordinary shares of IAG and are due to mature in 2018. The company expects the bonds conversion price to be set at a premium of between 30% to 35% with a fixed rate of interest between 1.75% to 2.5%, payable semi-annually in arrears.

Full conversion of the bonds would see an up to 5.0% increase in the number of IAG shares in issue.

IAG is the sole owner of Vueling after acquiring a 44.66% interest in April, adding to the 45.85% already owned by its subsidiary Iberia.

The airline group paid €123.5m for Vueling shares which was funded initially by bridge loans from British Airways and Banco Santander. The net proceeds from the bonds will be used partly for the repayment of the loans.

"We are raising cash to fund our acquisition of Vueling, an airline that will be a great addition to IAG," Chief Executive, Willie Walsh, said.

"It will also enable IAG to have cash available to improve general liquidity and improve the credit profile of the group."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Don’t miss this bus: take a bet on National Express
Trading

Don’t miss this bus: take a bet on National Express

Bus operator National Express is cheap, robust and ideally placed to ride the recovery. Matthew Partridge explains how traders can play it.
19 Oct 2020
Three stocks that can cope with Covid-19
Share tips

Three stocks that can cope with Covid-19

Professional investor Zehrid Osmani of the Martin Currie Global Portfolio Trust, picks three stocks that he thinks should be able to weather the coron…
12 Oct 2020