EasyJet to raise up to 1.2bn euros from bond deal

AMSTERDAM: EasyJet will raise up to 1.2 billion euros ($1.46 billion) from a seven-year bond sale later on Wednesday, a memo from one of the banks arranging the deal seen by Reuters showed, days after Britain laid out a timeline for a return to international travel.

The deal has attracted investor demand of 5.87 billion euros so far, the lead manager said, helping the company to reduce the yield on offer to 2%, from around 2.375% when the sale first started on Wednesday. The size of the deal has increased to the top end of a 1.0 billion-1.2 billion euro target range.

The positive response from bond investors comes after British Prime Minister Boris Johnson set out a phased plan on Monday to end England's COVID-19 lockdown.

Under the plan, Britain could see curbs on international travel removed as early as May 17.

Encouraged by positive news about travel in its biggest market Britain, easyJet moved to appoint BNP Paribas, Morgan Stanley and Santander as joint bookrunners on Tuesday to run a bond sale.

EasyJet said that bookings for flights for this summer had soared more than 300% since Britain's announcement, and holidays by more than 600%, compared to their levels last week.

The airline's share price has risen more than 18% to 982 pence this week, while the yield on its outstanding June 2025 notes has dropped 51 basis points in two sessions to 1.39% . Bond yields move inversely to prices.

Proceeds from the bond sale will be used for general corporate purposes and for refinancing debt, according to an investor announcement. EasyJet has a 500 million euro bond maturing in February 2023.