Ryanair sells €1.2bn bond at record low coupon

Euronext Dublin

Ryanair announced on Tuesday it sold a five-year €1.2 billion Eurobond at a record low coupon rate 0.875%. 

Reuters reported the sale received demand of €5.2 billion euros, citing two lead managers.

“The bond will be listed on the Irish Stock Exchange (Euronext) which offers access to both Europe and the rest of the world,” said Ryanair.

“The joint bookrunners were BNP Paribas, Citigroup and Commerzbank.”

Ryanair is one of the few airlines that has an investment-grade credit rating, with a BBB score from both S&P Global Ratings and Fitch Ratings.

Ryanair’s Group CFO Neil Sorahan said: “We are pleased with the success of our latest, low-cost, unsecured bond issue. 

“This €1.2bn transaction, which was multiple times oversubscribed, was keenly priced at a coupon of 0.875%.”

The bond sale happened a day after Ryanair announced a record annual loss of €815 million for the year to March 31, compared to a previous year profit of €1 billion, as its traffic fell 81% from 148.6 million passengers to 27.5 million due to Covid-19 restrictions.

Revenue fell 81% to €1.64 billion.

Colm Rainey, head of UK and Ireland corporate debt capital markets at Citigroup, told Reuters the coupon was the lowest ever achieved by Ryanair in part due to the fact investors are keen on its management, cost discipline and sheer size and scale.

“Within this sector this is where you place your bets,” Rainey said.

In its outlook on Monday, Ryanair said “visibility for the remainder of FY22 is close to zero although bookings have jumped significantly from a very low base since week 1 of April.”

The firm said it cautiously believes it can break even in the current year – assuming that a successful rollout of vaccines this summer allows a “timely easing” of European government travel restrictions.