In a week when Europe’s debt market broke records, with the equivalent of USD113 billion worth of sales taking place, Wizz Air Holdings raised funding by issuing a new EUR500 million euro (USD572 million) bond.
The offering, which is expected to close on January 19, was launched at minimal premium, with the Wizz Air (W6, Budapest) parent pricing it in 1% notes that are due in 2026.
The budget carrier said in its January 13 announcement that it was “taking advantage of robust financing markets and very attractive pricing” and added that it intends to use the proceeds for general purposes including the repayment of a GBP300 million pound (USD411 million) British government loan provided in April 2020.
The provision of this bailout via the Bank of England’s Covid Corporate Financing Facility (CCFF) was a controversial decision in the aviation sector at the time as struggling Virgin Atlantic (VS, London Heathrow) received no state support. The new bond, Wizz Air said, will repay the CCFF facility in February 2022.
Executed within the framework of the Euro Medium Term Note Programme, “the offering was multiple times oversubscribed,” the company said. It is Wizz Air's second bond, after its debut offering, also worth EUR500 million, priced at 1.35% and due in 2024, took place one year ago.
Wizz Air CEO József Váradi commented that the second bond was “at even more attractive pricing levels compared to our debut offering last year” and added that “the proceeds will further support Wizz Air as it scales up to become an even stronger low-cost player in the coming years.”
The company concluded its statement by saying that it would announce its third-quarter results for the period ending December 31 on January 26.
