Air France-KLM announces the successful issuance of new hybrid bonds
Rhea-AI Summary
Air France-KLM (AFLYY) has successfully issued €500 million in hybrid bonds with an annual fixed coupon of 5.75% and a yield of 5.875%. The undated and deeply subordinated bonds received strong market interest, with an orderbook exceeding €1.75 billion, representing a 3.5x oversubscription rate. The hybrid bonds, which will be rated BB by Fitch and B+ by S&P, qualify for 50% equity credit from both agencies. Both rating agencies reaffirmed Air France-KLM's long-term issuer ratings (BBB- from Fitch and BB+ from S&P) with Stable outlooks. The proceeds will be used for general corporate purposes, including potential refinancing of existing subordinated instruments. The bonds will be traded on Euronext Paris.
Positive
- Strong market demand with 3.5x oversubscription rate, demonstrating investor confidence
- Bonds qualify for 50% equity credit with rating agencies
- Stable outlook maintained by both Fitch and S&P
- Will help optimize financing costs and maintain financial flexibility
Negative
- Additional debt obligation with 5.75% annual coupon payment requirement
- Lower credit rating for the hybrid bonds (BB/B+) compared to company rating
News Market Reaction – AFLYY
In the trading session that priced this news, AFLYY gained 0.98%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Paris, 15 May 2025
Air France-KLM announces the successful issuance of hybrid bonds for an amount of
Air France-KLM (the “Company”) successfully priced an issuance of
The issue of Hybrid Bonds was very well received by the market with an orderbook of over 1.75 billion euros (representing an oversubscription rate of 3.5 times). This result reflects investors' strong confidence in the Company's strategy and the strength of its credit profile.
The estimated net proceeds of the issue of the Hybrid Bonds will be used by the Company for general corporate purposes including the potential refinancing of existing subordinated instruments within the Group. This issue enables the Group to simplify its balance sheet and optimize its cost of financing while maintaining financial flexibility.
An application will be made for the Hybrid Bonds to be admitted to trading on Euronext Paris.
Investor Relations
Michiel Klinkers Marouane Mami
michiel.klinkers@airfranceklm.com marouane.mami@airfranceklm.com
Website: www.airfranceklm.com
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