International Consolidated Airlines Group, S.A. ("IAG" or the "Issuer") announces that, following the launch of the offering (the "Offering") of senior unsecured bonds (the "Bonds") convertible into ordinary shares of IAG (the "Shares") earlier today and as a continuation to the insider information official communication previously published, IAG has now set the final terms of the Bonds. Pursuant to the demand, the initial issue size of the Offering has been set in the amount of EUR 825,000,000.
The Bonds will carry a fixed rate of interest of 1.125% per cent payable semi-annually in arrears. The conversion price of the Bonds has been set at EUR 3.3694 per Share, which represents a premium of 45 per cent. over 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.
The target market for the Bonds is 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 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.
An application will be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange.
Settlement of the Bonds is expected to take place on or about May , 2021.
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 that the Issuer shall not be obliged to comply with the lock-up if it has consulted with each of the Joint Global Coordinators and has obtained the prior written consent of at least two of them.
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 billion government-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.
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.