International Consolidated Airlines Group, S.A. ("IAG" or the "Issuer") announces today it is launching an offer of senior unsecured bonds (the "Bonds") convertible into ordinary shares of IAG (the "Shares"), for an initial issue size of approximately EUR 800,000,000 due 2028 (the "Offering").

The final terms of the Bonds are expected to be determined and announced later today and settlement is expected to take place on or about May 18, 2021.

The Offering is being issued by IAG under the powers delegated to its board of directors at its annual general meeting held on September 8, 2020.

The target market for the Bonds is comprised of eligible counterparties and professional clients only. The Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA") or the United Kingdom. Accordingly, no PRIIPs Regulation key information document has been prepared as the Bonds are not available to retail investors in the EEA or the United Kingdom. Accordingly, the Bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA or the United Kingdom.

The Bonds shall bear a fixed rate of interest payable semi-annually in arrears which shall be determined as part of the bookbuilding process. The conversion price of the Bonds is expected to be set at a premium of 45 - 50 per cent. to the volume weighted average price of the Shares on the London Stock Exchange in the period from launch to pricing, translated into EUR at the prevailing exchange rate. The Bonds will be issued at 100 per cent. of their principal amount and, unless previously redeemed, converted or purchased and cancelled, will be redeemed at 100 per cent. of their principal amount on the maturity date.

IAG will have the option to redeem all of the Bonds, but not only some, on or after 8 June 2026 (5 years and 21 days following the settlement date of the Bonds), together with any accrued interest, if the volume weighted average price of the Shares has been at least 130 per cent. of the conversion price over a specified period. The Issuer will also have the option to redeem all outstanding Bonds, but not only some, at their principal amount, together with any accrued interest, at any time, if 85 per cent. or more of the originally issued principal amount of the Bonds shall have been previously converted, redeemed or repurchased and cancelled.

Background to the Offering and Use of Proceeds

Since the start of the COVID-19 pandemic, IAG has taken decisive action to bolster its liquidity by reducing capital requirements and increasing funding, resulting in total cash and facilities of €10.5 billion recently reported as of 31 March 2021 compared to €9.1 billion as of the end of 2019. Funding in 2020 and 2021 to date has included €2.7 billion Rights Issue, €1.5 billiongovernment-supported loans, £2.0 billion (€2.2 billion) UK Export Finance loan, €1.2 billion unsecured bonds and €2.6 billion aircraft financings, sale and leaseback transactions and other asset sales. In addition, IAG increased and extended its facilities by securing a $1.8 billion (€1.5 billion) 3-year Revolving Credit Facility.

Given the continuing uncertainty in respect of air travel, the net proceeds from the Offering will be used by IAG to (i) strengthen the Group's balance sheet and increase the Group's overall liquidity position and (ii) provide the Group with increased operational and strategic flexibility to take advantage of a recovery in demand.

An application will be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange.

Under the terms of the Offering, IAG will agree not to issue or sell any Shares for a lock-up period ending 90 days after the settlement date of the Bonds, subject to customary exceptions and the Issuer shall not be obliged to comply with the lock-up provision if it has consulted with each of the Joint Global Coordinators and has obtained the prior written consent of at least two of them.

BofA Securities Europe SA, Deutsche Bank Aktiengesellschaft and HSBC are acting as Joint Global Coordinators and Joint Bookrunners and BNP Paribas, Citigroup Global Markets Europe AG and Credit Suisse are acting as Co-Bookrunners and Caixabank, Commerzbank Aktiengesellschaft, MUFG and SMBC Nikko are acting as Co-Managers.