Lufthansa organized itself on the capital market by means of a 1,6 billion euro bond. The largest airline in Germany intends to use the proceeds to partially repay the state loan granted by the Reconstruction Loan Corporation.
“We are very grateful for the support we are receiving in our home markets. The bond successfully placed today enables us to repay the entire KfW loan. Refinancing even lowers our financing costs. However, despite the repayment, it is likely that we will avail ourselves of other elements of the stabilization package that are currently unused. The extent to which we will do this depends on the further course of the pandemic, ”says Remco Steenbergen, Chief Financial Officer of Deutsche Lufthansa AG.
The bond with a denomination of 100.000 euros was placed in two tranches with a term of four and seven years respectively: The tranche with a term until February 11, 2025 has a volume of 750 million euros and bears interest of 2,875 percent per year. The tranche with a term until February 11, 2028 has a volume of 850 million euros and earns interest of 3,75 percent per year.
“With the long-term funds now raised and the funds raised in the amount of 2,1 billion euros in the second half of 2020, Lufthansa has secured the refinancing of all financial liabilities due in 2021 in the amount of around 2,6 billion euros. As contractually agreed as part of the stabilization measures last June, the raising of additional funds leads to the repayment of Lufthansa's KfW loan. Thus, the loan in the amount of 1 billion euros will be repaid early to KfW. After repayment, Lufthansa can thus freely dispose of the aircraft pledged to secure the loan, ”said Lufthansa in a press release.