Aer Lingus-owner IAG boosts liquidity with €825m convertible bond

Aer Lingus-owner IAG said on Tuesday it would raise €825 million from a convertible bond, the group’s latest move to strengthen its balance sheet as travel remains at very low levels during the pandemic. IAG, which also owns British Airways, Iberia and Vueling, has a weekly cash burn rate of E175m while most of its fleet is grounded due to restrictions, meaning its focus over the past year has been on raising funds. Forecasting a travel recovery from July, the group said last week that it had liquidity of E10.5b, helped recently by a new revolving credit facility and the deferral of some pension payments. On Tuesday it said its convertible bond issue would boost its liquidity by around E825m. Strong demand for the offering meant it would raise more than the E800m initially targeted for the senior unsecured bonds, which are convertible into IAG shares, and due in 2028. IAG said the proceeds would strengthen its finances given continued uncertainty around the travel recovery, but could also be used to provide extra resources to take advantage of a recovery in demand.<br/>