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Qantas to refinance A$350m debt with flexible loan facility

Qantas will refinance A$350 million ($272 million) of debt due in the 2018 fiscal year using an innovative new facility that will allow it to change the pool of aircraft that will act as security.

The Oneworld carrier says in a statement provided to FlightGlobal that the new facility will allow it to refinance the debt for eight years, and will mean that there is no change in its net debt levels.

“It also gives us more flexibility in terms of what aircraft are encumbered allowing us to change the aircraft depending on possible fleet changes or future plans,” the carrier adds.

While not providing details on the pricing of the facility, Qantas says that the “terms and pricing of the transaction shows the strength of the Qantas Group’s balance sheet.”

BNP Paribas is the sole structuring bank, and National Australia Bank is the joint lead arranger and bookrunner, sources tell FlightGlobal.

Reuters reported that a term sheet for the facility suggests that the initial collateral for the loan will be a pool of Boeing 737-800s and Airbus A320s operated by the carrier and its Jetstar budget unit, as well as A330s and 787s.

In recent years, Qantas has purchased a number of aircraft as they have come to the end of their leases, as part of its broader efforts to strengthen its balance sheet and lift the level of its unencumbered assets. It has also committed to using existing cash to the finance the delivery of two of its forthcoming Boeing 787-9s.

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