Lufthansa expects to gain proceeds in €525 million bonds offering

A German airline Lufthansa (LHAB) (LHA) announced the launch of €525 million senior unsecured convertible bonds offering. The air carrier stated that the bonds could be converted into new either existing no-par value ordinary registered shares.

On November 10, 2020, Lufthansa (LHAB) (LHA) decided to submit the bonds offering which would be placed through an accelerated book-building process for institutional investors. Following the official Lufthansa’s (LHAB) (LHA) announcement, the bonds would be placed with a coupon between 2.25% and 2.75% annually.

The airline stated that the bonds would be redeemed “at their principal amount“ on November 17, 2025. However, the company outlined that the exact final terms could be changed. In a document, the German airline assured investors that it would not place any other shares or equity-linked offer within a period of 90 calendar days after the recent proposal would be implemented. Besides, Lufthansa (LHAB) (LHA) would not step into “any transaction having a similar economic effect or subject to customary exemptions“.

Lufthansa (LHAB) (LHA) stated that the measure came with the aim to gain proceeds for the general purposes of the company. According to the financial airline’s results of Q3 2020, it suffered a net loss of almost €1.3 billion while struggling to bounce back from the paralyzing impact of the COVID-19 related worldwide lockdowns. 

In addition to the recent bonds offering, Lufthansa (LHAB) (LHA) also plans the further costs cutting by reducing its fleet by 150 aircraft by 2025 and diminish the workforce by cutting at least 22,000 jobs.


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