UK’s Heathrow Airport
350mn ($486mn) via the issue of 7Y Class B notes at a yield of 2.703%, UK Treasury (UKT) + 215bp, 30bp inside the initial guidance of UKT+245 area, through Heathrow Funding Ltd.
The senior secured bonds carry a coupon of 2.625% and have expected rating of BBB-/BBB (S&P/Fitch), . The bonds received orders worth £
1.1bn, 3.14x the issue size. The bookrunners for the deal include Barclays, HSBC (B&D)
Proceeds will be used for general corporate purposes. The issuance comes as the airport looks at improving its liquidity, which suffered due to restrictions on air travel. Last month, UK’s PM had extended the ban on non-essential international travel to and from England till at least May 17, which has only exasperated the pain suffered by airports, airlines and the leisure industry. The company has upcoming Class A debt redemptions of $1.7bn in 2021
. The company’s director of Treasury and Corporate Finance said
, “We are extremely pleased to return to the public Class B market after nearly 10 years and the funds raised further strengthen our liquidity position,”
Heathrow Finance Plc’s 4.625% 2029s
and 4.375% 2027s
were down 0.12 and 0.11 to trade at 101.23 and 101.49 respectively.