The Latvian national airline airBaltic announced to have successfully priced a EUR 340 million issue of 14.50% 5.25-year (5 years and 3 months) senior secured bonds. This will be the largest corporate bond issue originating from Latvia.
This transaction was well received by both the international and local investment communities, as well as the Latvian State, resulting in a final allocation to more than 100 leading global institutional investors from more than 20 countries across 3 continents. The demand for the bond exceeded the supply with the final orderbook surpassing EUR 800 million.
The pricing follows an eight-day investor roadshow, during which the airBaltic management team met a large number of leading global institutional investors.
The Latvian state owns 97.97% of airBaltic shares, while 2.03% of shares are owned by financial investor, Danish entrepreneur Lars Thuesen, who also owns Aircraft Leasing 1.
Because of better operational results, airBaltic board believes in that private and/or public financing sources will remain available to the airline in the first half of 2024. This is why they believed airBaltic will be able to successfully refinance its existing bonds and attract additional financing.
Martin Gauss, President and CEO of airBaltic:
“With successfully priced bond issue, airBaltic has strengthened its position in the Baltic region by accessing international debt capital markets through its eurobond offerings. The successful placement of this bond serves to refinance our previously issued 200 million eurobond, demonstrating the trust investors have in airBaltic's strategy. This refinancing will substantially boost the company's liquidity and financial stability allowing us to continue our investments in expanding and modernizing our fleet. This marks a historic milestone for our airline.”
“Looking ahead to 2024, we continue on our successful course towards the potential initial public offering (IPO). Our core objectives remain unchanged – to ensure the best connectivity to and from the Baltics, as well as to enhance the passenger experience and deliver a fundamental contribution to the economy,” Gauss added.
The settlement of the bonds is expected to take place on May 14, 2024, and the bonds are expected to be listed on Euronext Dublin stock exchange.
On Tuesday, April 30 the Latvian government supported the purchase of bonds of the Latvian national airline airBaltic worth up to 136 million euros, Minister of Transport Kaspars Briškens (Progressives) confirmed at a press conference.
"The state would be involved not only as an investor in the financial sector, but also in strategically important state-owned enterprises," Briškens said
airBaltic's audited turnover last year amounted to 664.289 million euros, which is 33.2% more than in 2022, and the company also made a profit of 33.852 million euros, as opposed to losses the year before.
In 2019, airBaltic released five-year bonds worth EUR 200 million. More than 100 investors from 25 countries bought the bonds. Demand had even exceeded supply. The interest rate for those bonds is 6.75%.
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