Ryanair launches 850mn euro bond sale, first in 3 years

AMSTERDAM: Ryanair launched on Tuesday an 850 million euro ($1 billion) bond sale, its first in three years, a sign European bond markets are starting to reopen to the aviation sector.

The sale by Europe's largest low-cost carrier is the second by an airline in Europe since the COVID-19 pandemic crippled the sector. Majority state-owned Finnair issued a hybrid bond, which combines features of debt and equity, last month.

Investors put in 4.4 billion euros of orders for the bond, more than five times the amount Ryanair is seeking to raise. .

Analysts said Ryanair's balance sheet, one of the strongest in the industry with more than 3.9 billion euros of cash at June 30 and aircraft worth about 7 billion euros, had priced the bond favourably, with a yield of 3%.

The company raised 400 million euros from shareholders last week.

"To me it says that the door is wide open for (airline) deals," said Daniel Ender Aizencang, fixed income strategist at ABN AMRO

With credit markets recovering, issuance has picked up in the United States, but lagged in Europe.

Ryanair's deal was helped by credit ratings agency S&P, which on Monday removed a 'credit watch' on Ryanair's 'BBB' rating - two notches above junk - making an imminent downgrade less likely.

Despite pandemic challenges, the agency still considers Ryanair one of the financially strongest airlines.

Ryanair hired Barclays, BNP Paribas and Citi for the sale.