Ryanair Eyes Euro Bond in Test of Virus Impact on Airline Debt

(Bloomberg) -- Ryanair Holdings Plc is readying its first euro-bond sale since 2017, testing investor appetite for high-grade airline debt amid coronavirus travel upheavals.

Europe’s biggest discount carrier will speak to investors on Monday about a potential five-year bond of at least 500 million euros ($592 million), according to a person familiar with the matter, who asked not to be named as they aren’t authorized to speak publicly. Chief Financial Officer Neil Sorahan will lead the call.

The Irish carrier recently signaled plans for a bond sale as it seeks to pare debt-repayment risks over the next 12 months, as well as positioning itself to potentially profit from the shrinkage or failure of rivals due to virus travel disruptions. The airline, which sold 400 million euros of new stock last week, has held onto investment-grade ratings during the virus turmoil in contrast to competitors, such as Deutsche Lufthansa AG and British Airways parent IAG.

Ryanair has 2.45 billion euros of bonds outstanding, including an 850 million euro note coming due in June, according to data compiled by Bloomberg. The carrier is rated BBB, two steps above junk, at both S&P Global Ratings and Fitch Ratings Ltd. Both assessors have flagged ratings risks.

Finnair Oyj is the only carrier to have visited Europe’s primary debt market since the coronavirus outbreak forced airlines worldwide to ground planes and cut services. It paid 10.25% on a euro hybrid note last month.

A Ryanair spokesperson declined to comment on the bond sale when contacted by Bloomberg News via email. Barclays Plc, BNP Paribas SA and Citigroup Inc. are arranging the bond-sale call, the person familiar said.

The carrier said last week that the “enhanced liquidity” from the share placement will “likely optimize” the bond sale.

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