Etihad Airways and equity partners raise $500m

Funds will be used for capital expenditure and investment in fleet, as well as for refinancing, depending on each individual airline’s needs.

The bond issue is Etihad's first venture into the fixed-income debt markets alongside the other airlines. Kamran Jebreili / AP Photo
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Etihad Airways, its airport services business and five of its equity partners on Tuesday raised US$500 million on international markets.

The Abu Dhabi-based carrier was joined by airberlin, Air Serbia, Air Seychelles, Alitalia and Jet Airways in the issue of the five-year debut bond.

The success of the fundraising initiative was a “major endorsement” of the businesses’ shared strategies, said James Hogan, president and chief executive of Etihad.

“A key element of our equity partner strategy is creating a total which is greater than the sum of its parts, a grouping which can work together to improve revenues, reduce costs and uncover exciting new business synergies,” Mr Hogan said.

“We have already been able to identify significant opportunities together, whether that be in shared IT platforms, joint fleet procurement or shared training costs. Commercial fundraising is no different.

“Our proposed transaction is simply the next logical step in our growing partnership and underpins its strategic importance.”

Etihad Airways, Etihad Airport Services, airberlin and Alitalia will each receive almost 20 per cent of the funds. Sixteen per cent will be given to Jet Airways, with the remainder divided between Air Serbia and Air Seychelles.

Most of the funds raised will go towards capital expenditure and fleet investment, as well as for refinancing.

The transaction marks the first time Etihad and its partners have raised funds together.

The issue was priced at 6.875 per cent, narrower than the initial price guidance of 7 per cent, Reuters reported.

Goldman Sachs, ADS Securities and Anoa Capital arranged the transaction.

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