British Airways secures another £1bn UKEF-backed facility

British Airways (BA, London Heathrow) has reached an agreement with UK Export Finance (UKEF) and a syndicate of banks for a five-year Export Development Guarantee committed Credit Facility (UKEF Facility) of GBP1.0 billion pounds (USD1.37 billion).

According to parent firm IAG International Airlines Group, this is in addition to a GBP2.0 billion (USD2.74 billion) UKEF guaranteed facility that was announced in December 2020 and drawn in March 2021.

“British Airways intends to draw down only if and when required and the facility will not be utilised upon signing,” it said in a stock market disclosure.

As with the previous facility, British Airways will be entitled to repay any drawn loan at any time on notice. There are also similar non-financial covenants, including restrictions on dividend payments to IAG. Both facilities have similar sustainability-linked features.

IAG, which aside from British Airways also owns Iberia, Vueling Airlines, Aer Lingus, and LEVEL, said that as of the end of September, its total cash pile stood at a “strong” EUR10.6 billion euro (USD12.26 billion).

“This facility further bolsters liquidity,” it added.