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Ryanair plans first ever bond sale

Friday, May 30 15:14:49

Ryanair is planning its first bond sale after corporate borrowing costs fell to a record in Europe and the Irish company was awarded credit ratings that make it the highest-ranked carrier in the world.

Europe's No. 1 discount airline has hired banks to arrange investor meetings starting June 3 to market a possible sale of notes in euros, according to a person familiar with the matter. It was graded BBB+ by Fitch Ratings this month, three levels above junk, the same rank awarded by Standard & Poor's in April.

Ryanair is refining its no frills model with customer- friendly enhancements such as allocated seating and an improved website as it seeks to lift passengers numbers by more than one- third to 110 million by 2019. The Dublin-based airline agreed to buy five more Boeing Co. 737-800s last month, bringing its total order book to 180 jets worth $16 billion at current list prices.

"We have our first deliveries coming in September, so we're looking to do a bond," Chief Financial Officer Howard Millar said on May 19, adding that the value would be at least E500 million, with a seven-year term.

BNP Paribas, Citigroup and Deutsche Bank AG are the banks mandated by Ryanair, according to the person, who asked not to be identified as they are not authorised to speak. Citi is acting as global coordinator, the person said.

Ryanair, led by Chief Executive Officer Michael O'Leary, didn't immediately respond to requests for further comment.

The average yield on investment-grade bonds in euros fell 18 basis points this month to an all-time low of 1.6 percent, according to Bank of America Merrill Lynch index data.