Ryanair Will Use Its Stellar Credit Rating to Drive Big Bond Sale

Skift Take

Make fun of Ryanair all you want. It has the best credit rating of any airline on the planet.

— Dennis Schaal

Ryanair Holdings Plc is planning its first bond sale after corporate borrowing costs fell to a record in Europe and the Irish company was awarded credit ratings that make it the highest-ranked carrier in the world.

Europe’s No. 1 discount airline has hired banks to arrange investor meetings starting June 3 to market a possible sale of notes in euros, according to a person familiar with the matter. It was graded BBB+ by Fitch Ratings this month, three levels above junk, the same rank awarded by Standard & Poor’s in April.

Ryanair is refining its no frills model with customer-friendly enhancements such as allocated seating and an improved website as it seeks to lift passengers numbers by more than one- third to 110 million by 2019. The Dublin-based airline agreed to buy five more Boeing Co. 737-800s last month, bringing its total order book to 180 jets worth $16 billion at current list prices.

“We have our first deliveries coming in September, so we’re looking to do a bond,” Chief Financial Officer Howard Millar said on May 19, adding that the value would be at least 500 million euros ($681 million), with a seven-year term.

The average yield on investment-grade bonds in euros fell 18 basis points this month to an all-time low of 1.6 percent, according to Bank of America Merrill Lynch index data.

To contact the reporters on this story: Kari Lundgren in London at [email protected]; Jennifer Joan Lee in London at [email protected] To contact the editors responsible for this story: Benedikt Kammel at [email protected]

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