Japan Airlines mulls $92mn bond sale in late 2Q21

JAL – Japan Airlines (JL, Tokyo Haneda) is planning a yen bond sale next month, unnamed sources told Bloomberg News. It has reportedly hired banks for an offering of about JPY10 billion yen (USD92 million) of five-year notes. If confirmed, the move would be Japan Airlines’ first debt issue since March 2020. According to Bloomberg financial data, the yield premium on JAL bonds maturing in 2023 widened by more than 50 basis points to 104 in May 2020 as the Covid-19 pandemic restricted international travel, but this has since decreased by 25 basis points as expectations grow of a gradual recovery in tourism. As previously reported, recent aviation sector debt offerings suggest that there is currently demand among investors for such notes as they bet on a rebound in passenger traffic. However, the slow speed of Japan’s vaccine rollout has delayed a recovery in the travel sector there. JAL rival ANA Holdings, parent of ANA – All Nippon Airways (NH, Tokyo Haneda), revealed on May 19 that it planned to sell sustainability-linked notes, to be offered in June in the amount of JPY10 billion with a five-year maturity. Japan Airlines was not immediately available for comment.