SAS Group is to tap the capital market with a lower convertible bond offering than initially anticipated.
The group says it intends to launch a SKr1.6 billion ($245 million) offer, with a five-year tenor, on 4 March.
Earlier this month, the trinational company issued a SKr2 billion share issue to fund its fleet modernisation and reduce dependence on bank financing. It also said it intended to issue up to SKr2 billion in convertible bonds to redeem certain of the company’s outstanding bonds maturing in 2015.
The senior unsecured bonds to be launched on 4 March are expected to bear interest in the range of 3.125-3.625%, payable semi-annually in arrears.
The conversion price is 25-30% over the volume-weighted average price of the shares between launch and pricing of the offer.
SAS Group has the right to redeem “all but not some” of the bonds at any time after approximately three years following the issue date.
The group says the April 2019 bonds are guaranteed by Scandinavian Airlines Systems Denmark – Norway – Sweden.
JP Morgan is acting as sole bookrunner with respect to the bonds issuance.
In February 2011, SAS issued two senior unsecured bonds with a 3.25-year term to repay certain outstanding bonds maturing in the short term. The SKr1.3 billion bond had a 10.5% coupon while the €75 million ($104 million) bond had a 9.65% coupon.