Virgin Australia Holdings (VAH) has successfully priced $US732.6 million in bonds to international investors, with the debt backed by its fleet of 24 Boeing aircraft.
The bonds, which are called enhanced equipment notes, are to be issued across the three classes of Boeing aircraft, with a weighted average coupon rate of 5.5% over the expected life of the three classes, which is around 6.5 years.
Virgin said demand was strong for the debt issue, with its order book oversubscribed multiple times.
The airline plans on using the proceeds to repay existing financing facilities and for "general corporate purposes".
Virgin joins several other large Australian corporations, such as Transurban (TCL) and Origin (ORG), rushing to lower their interest costs by replacing more expensive debt through corporate bond issues.
Goldman Sachs was the sole structuring agent and lead bookrunner, while Credit Agricole Securities and Natixis were joint bookrunners.