Qantas Airways (QAN) has sold $300 million of eight year, senior, unsecured fixed rate notes. The proceeds will be used to repay debt due in 2016.
The bonds, due May 19, 2022, carry a 7.75% annual coupon and their spread is at a semi quarterly asset swap plus 400 basis points, a pricing sheet emailed to Data Room said. Australia’s biggest airline wanted to sell at least $100m of debt.
Deutsche Bank was the sole manager of the airline’s debt sale. Moody’s rates the airline’s bonds at Ba1, negative, and Standard & Poor’s BB , negative.
Qatas is replacing two-year debt with eight-year debt, improving the maturity profile of its debt that it hopes to reduce by $1 billion in its 2015 financial year.
As of December 31, Qantas had $6.27bn of debt and had negative free cash flow of $78m, according to Bloomberg data. The company made a $340m loss in the six months to December 31, says Bloomberg.
Qantas shares have gained 11 per cent this year. The stock closed down 1.5 cents, or 1.2%, at $1.22 on Monday.