IAG, the Spanish-based parent company of British Airways, announced a new fund raising on Thursday.
During the day, the company raised a further €1.2 billion via a bond sale. The money will be repaid in two tranches:
- €500 million to be repaid in March 2025
- €700 million to be repaid in March 2029
For clarity, the bonds are only for sale to institutional investors and not to the general public.
The four year bonds were issued with a coupon of 2.75% (down from a proposed 3.25% at the start of the day). The eight year bonds were eventually priced at 3.75%, down from a proposed 4.25%.
Despite the cut in the coupon, it is still above the European average for junk-rated corporate debt of 2.59%. The bonds are rated B1, which is a ‘junk’ rating.
For a quick comparison, the typical five year fixed rate UK savings account is currently paying 1% to 1.25%. There would be considerable demand – albeit with considerable risk compared to a savings account – if similar £-denominated bonds were offered to UK private investors.
The stated purpose of the fund raising is to “include but not be limited to”:
- strengthening the Group’s balance sheet and increasing the Group’s overall liquidity position
- helping the Group withstand a more prolonged downturn in air travel
- providing the Group with the operational and strategic flexibility to take advantage of a recovery in demand for air travel
The official announcement is on the IAG website here.
How to earn Avios from UK credit cards (October 2021)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
There are two official British Airways American Express cards. Both have increased sign-up bonuses until 2nd November 2021:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:
The 30,000 points bonus on Amex Gold runs to 9th November 2021. The 60,000 points bonus on The Platinum Card runs to 2nd November 2021.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card:
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies. This card has a limited time offer of 60,000 Avios when you sign up:
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.
(Want to earn more Avios? Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)