Lufthansa yet to tap into Euro medium term note programme

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

Lufthansa's euro note programme, which was launched in November 2012, remains untapped and available to the carrier for its financing needs.

Under the debt issuance, the maximum aggregate principal amount of the notes outstanding at any one time cannot exceed €4 billion ($5.17 billion), says Lufthansa. The yield for the notes will have fixed interest rates.

A source at Lufthansa says: "The advantage of such a bond programme is we can issue immediately. The work is already done."

Barclays Bank, Deutsche Bank, JP Morgan Securities, Morgan Stanley, Société Générale, UBS, UniCredit Bank are the dealers. Deutsche Bank acted as the arranger in the programme.

Lufthansa has an €850 million fixed-rate bond at 6.75% that matures in March 2014.It also hold a €750 million 6.5% fixed-rate bond, which matures in July 2016.

Both issuances will be paid back on maturity, says Lufthansa.

Lufthansa Group reduced its net debt by 16% to €2 billion for the 2012 financial year. Cash and cash equivalents totalled €1.43 billion, compared with €887 million in the previous year. Securities amounted to €3.53 billion, up from €3.11 billion in 2011. In the 12-month period, cash flow from operating activities totalled €2.84 billion, €486 million up from the previous year.

Last week chief financial officer Simone Menne said operating cash generated during 2012 meant Lufthansa was able to finance its necessary capital expenditures directly from the operating business. The group's free cash flow totalled €1.4 billion at year-end.

In 2013, Lufthansa will take delivery of five Boeing 747-8s, one Airbus A330, 22 A320 family aircraft, four Embraer 195s and two Boeing 777F units.