LOT Polish Airlines to tap Ex-Im bond market again

Source: Flightglobal.com
This story is sourced from Flightglobal.com

LOT Polish Airlines could issue another US Export-Import Bank (Ex-Im) bond to fund an upcoming Boeing 787 delivery after the Polish carrier closed its first ever capital market issuance at the end of last month.

LOT closed two US Ex-Im backed bonds to fund the deliveries of two 787s on 20 June, a week after issuing the bonds, according to a source at the carrier.

The carrier secured financing for the first five aircraft of the type with an Ex-Im-guaranteed loan provided by Apple Bank for Savings last November, with an option to refinance the units in the capital markets with KGS-Alpha Capital Markets.

According the agreement, LOT had to exclude the first delivery from a capital market transaction and close the financing under the Ex-Im loan arranged by Apple Bank Savings. However, the carrier can refinance the other four deliveries with Ex-Im bond structures.

"We are looking at how we will close financing on the fourth delivery," says the source.

The fifth and final 787-8 delivery, under the Ex-Im guaranteed mandate, is scheduled for delivery at the end of this month.

LOT issued a $179 million US Ex-Im backed bond covering the second (MSN 37894) and third (MSN 35940) deliveries.

The amount secured against the first aircraft, which initially delivered in December 2012, is $86 million. The second 787, as part of this transaction, was $93 million.

The pricing on the coupon was 2.2%.