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November 16, 2007 |
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BRITISH AIRWAYS: Seeks EUR2.5 Bln Loan to Finance Iberia Bid British Airways plc and its private equity partner, Texas Pacific Group, are trying to obtain a EUR2.5 billion bridging loan despite turmoil in the credit markets as they attempt to push through a EUR3.60 per share (EUR3.4 billion) bid for Spanish airline Iberia Lineas Aereas de Espana SA, the Daily Telegraph reports. "The point is that the cash Iberia is sitting on can't be released until the deal is in place, so the consortium has to find extra money on the debt markets that can be repaid as soon as the deal completes. This isn't easy in the current market," a source close to the consortium was quoted by the Daily Telegraph as saying. According to the Times, Citigroup, Royal Bank of Scotland, and Natixis are to underwrite the deal, which is expected to close before Christmas. A source told the Daily Telegraph the consortium is close to making an offer, although it may not be no more than the indicative bid of EUR3.60 per share considering the price of oil and the state of the world economy. As previously reported in the TCR-Europe, BA, which holds a 10% stake in Iberia, has joined in May 2007 with TPG Capital, Vista Capital, Inversiones Ibersuizas and Quercus Equity to investigate a possible consortium offer for the Spanish carrier. The airline has ruled out further capital investment as part of any consortium offer. Headquartered in West Drayton, United Kingdom, British Airways Plc -- http://www.ba.com/ -- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways Plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported on Aug. 16, 2007, Moody's Investors Service upgraded the senior unsecured rating of British Airways plc to Ba1, one notch lower than the Corporate Family Rating (upgraded to Baa3, stable outlook), reflecting the subordination of unsecured debt to a substantial portion of secured debt. The debt instruments affected by the rating action are: -- GBP100 million 10.875% senior unsecured notes due 2008 to Ba1 from Ba2; -- GBP250 million 7.25% senior unsecured notes due 2016 to Ba1 from Ba2; -- US$115 million 5.25% and US$85 million 7.625% senior unsecured industrial revenue notes due 2032 to Ba1 from Ba2; -- EUR300 million 6.75% perpetual guaranteed preferred securities to Ba2 from Ba3 issued by British Airways Finance (Jersey) L.P. |
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