airBaltic successfully places a €200 million bonds issue

Cash injection will allow the Latvian flag carrier to continue with its fleet modernisation (airBaltic)

Latvian airline airBaltic has successfully placed a €200 million 6.75 per cent five-year bonds issue, thus becoming the largest corporate bond issue originating from Latvia.

The financial transaction was well received by the international and local investor community and demand for the securities exceeded supply, the hybrid carrier reports in a statement. The cash injection will allow the Latvian flag carrier to fulfill its ambitious fleet modernisation programme and strengthen its liquidity.

In May 2018, the Riga-based airline signed up for a firm purchase of 30 Airbus A220-300 aircraft (originally known as the Bombardier CS300), with options for an additional 30 of the type. That order complements an original order for 20 A220s and forms the backbone of airBaltic’s future expansion project called Destination 2025.

Martin Gauss, chief executive of airBaltic, enthuses: “This is a historic milestone for our airline. Not only have we issued the largest bond of any company in the history of Latvia, but airBaltic has also become the first airline in central and east Europe to access the international debt capital markets with a Eurobond offering. We will continue to execute the growth strategy outlined in our Destination 2025 business plan and we will significantly strengthen our liquidity with the issue of the bonds and continue investments into our fleet.”

The settlement of the bonds is expected to take place on July 30, 2019. The bonds will be listed on the Euronext Dublin stock exchange.

airBaltic selected JP Morgan as the global coordinator and together with Swedish financial group SEB as the main underwriters for its bond offering.

In the meantime, in June 2019, airBaltic transported some 528,450 passengers, 24 per cent more than in the same month of last year. It achieved a 62 per cent market share at its Riga base airport, enjoying a 22 per cent market share in Tallinn.

The airBaltic fleet consists of 39 aircraft: 19 Airbus A220-300s, eight Boeing 737s and 12 Bombardier Q400 next-gen turboprops.