airBaltic Delays Bond Issuance Amidst Economic Uncertainty

airBaltic (BT, Riga) has decided to postpone its plans to issue high-risk bonds due to concerns over prolonged high-interest rates and geopolitical risks impacting the market. The Latvian state-owned airline cited that the redemption conditions for its bonds, scheduled to mature in July 2024, had not been met. These bonds were initially issued in the summer of 2019, totaling EUR 200 million (USD 211 million) with a five-year tenure and a 6.75% interest rate.

The carrier had previously mentioned that the successful issuance of new bonds hinged on the buyout financing, with Morgan Stanley and JPMorgan Chase & Co set to arrange investor meetings. However, airBaltic has decided to shelve these plans temporarily.

Additionally, airBaltic remains on track for an Initial Public Offering (IPO) and has enlisted the services of STJ Advisors LLP and Superia Corporate Finance for advisory purposes.

In contrast to its bond postponement, airBaltic reported positive financial figures for the first nine months of the year, indicating a 39% YoY increase in total revenue at EUR 502 million (USD 529 million). The airline carried 3.4 million passengers during this period, reflecting a 41% growth. Full financial results for Q3 and the initial nine months are expected to be disclosed on November 8.

The decision to delay bond issuance aligns with a trend observed in other European companies, such as Sweden’s Stena and France’s FNAC Darty, which have also reconsidered debt sales in light of prevailing economic uncertainties. When contacted by ch-aviation, airBaltic declined to provide further comments on the matter.