Lufthansa raises €1.5bn in third bond sale of 2021

Lufthansa (LH, Frankfurt Int’l) has raised EUR1.5 billion euros (USD1.74 billion) in its third bond sale this year, taking advantage of favourable market conditions to boost its liquidity and to refinance debt, it announced in a statement on November 9.

The corporate bond, with a denomination of EUR100,000 (USD116,000), was issued in two tranches with different maturities, one with a term of two years, the other five-and-a-half years.

The first, with a term until November 16, 2023, has a volume of EUR600 million (USD694 million) and bears interest of 1.625% per year. The second, with a term until May 16, 2027, has a volume of EUR900 million (USD1.04 billion) and bears interest of 2.875%.

“The long-term funds, which were again raised on attractive terms, will be used to further strengthen Lufthansa Group’s liquidity and refinance existing debt,” said Remco Steenbergen, Lufthansa’s chief financial officer, adding that the placement “will further contribute to the full repayment of the government stabilisation measures in Germany.”

Lufthansa raised EUR1.6 billion euros (USD1.92 billion at the time) by issuing a bond in February, funds it pledged to channel towards repaying part of the bailout Germany provided it last year. It then further boosted its liquidity by raising another EUR1 billion euros (USD1.19 billion) in a corporate bond sale in July. It also staged an offering of convertible bonds last November for EUR525 million (USD618 million), due in November 2025, before raising it to EUR600 million (USD706 million) due to high demand.

The latest fundraising comes just as Germany’s flagship airline, together with its contemporaries, is preparing to benefit from the recent reopening of the United States to visitors from Europe.