International Airlines Group has set the precise conditions for a convertible bond issue aimed at funding its Vueling acquisition, boosting liquidity, and lowering cost of capital.
The issue totals €390 million ($506 million), and the bonds will accrue a fixed rate of interest of 1.75% per annum, payable semi-annually in arrears. Interest will be payable on 30 November and 31 May each year, with the bonds maturing in May 2018.
Conversion price is at a premium of 35% above the volume-weighted average price of ordinary IAG shares on the London Stock Exchange from launch to pricing.
IAG expects to set 31 May as the bonds' closing date for subscription and payment.