The Qantas Group has secured A$1.05 billion ($625 million) in a new round of debt funding to “strengthen its position as it manages through the coronavirus outbreak”.

The 10-year loan bears 2.75% interest and is securitised against seven Boeing 787-9s.

The jets are part of its fleet of 11 787-9s, which it says are unencumbered aircraft and “bought with cash in recent years”.

Cirium fleets data shows that the 11 jets, all operated by the mainline carrier, were delivered between October 2017 and December 2019.

The company says it has a further A$3.5 billion in unencumbered assets – this generally means they are free of creditor claims or liens, hence easier to sell or transfer – and retains flexibility to increase its cash balance “as a prudent measure in the current climate”.

It adds: “As previously announced, various steps have been taken to significantly reduce activity levels and costs given the dramatic revenue impact of the coronavirus pandemic and the related travel restrictions on Jetstar and Qantas passenger services.”

The additional liquidity increases the group’s available cash balance to A$2.95 billion, and it has access to another A$1 billion through an undrawn facility.

In the same statement today, Qantas disclosed a net debt position of A$5.1 billion, which remains at the low end of its target range, and has no major debt maturities until June 2021.

“In line with the rest of the Qantas debt book, the new funding contains no financial covenants.”

Chief executive Alan Joyce says: “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances. Everything we’re doing at the moment is focused on guaranteeing the long-term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”