(Bloomberg) – All major U.S. airlines have now avoided $ 25 billion in emergency pandemic loans from the U.S. government, avoiding the terms attached to this program in favor of the warm credit market embrace.
United Airlines Holdings Inc. on Monday said it would raise $ 9 billion from institutional investors through a combination of loans and bonds. A portion of that will bring in $ 520 million that the company has already borrowed from the federal government program.
A year ago, the US Treasury Department offered loans to support the industry as Covid-19 froze the business, but on terms deemed onerous. Companies had to issue government warrants and accept restrictions on dividends, share buybacks and executive compensation. Delta Airlines Inc. and Southwest Airlines Co. both pulled out last year.
While United and American Airlines Group Inc. borrowed relatively small sums, they had until next month to decide whether to fully embrace the program – and its strict terms – by taking billions of dollars in additional cash they had available. American bowed out by calling on institutional investors to raise $ 10 billion in March, and United also backed down.
The decisions largely reflect how robust credit markets have been due to support for the Federal Reserve’s pandemic – its promise to buy bonds and the signal from policymakers that rates will stay low for years to come.
“The market has been opened like crazy for the airlines,” said Roger King, senior analyst at CreditSights. “They have issued debt to the right and to the left, and they have less pressure on liquidity.”
In addition to repaying what it borrowed from the Treasury, United will use the proceeds from the sale of its debt to refinance a $ 1.4 billion term loan, a $ 1 billion gun, and to add liquidity to its record given the uncertain travel prospects.
Citigroup Inc. and Bank of America Corp. are jointly building a new fixed income trading platform, with an initial focus on secured loan bonds.
Mega deals were absent in the record $ 1.1 trillion M&A quarter, but Microsoft Corp. announced a nearly $ 20 billion all-cash purchase of Nuance Communications Inc., French telecommunications and media company Altice Europe NV announced plans to sell dollar and euro bonds to refinance debt more expensive, with expectations to raise the equivalent of 3 billion euros The real estate data company CoreLogic is on the verge of selling the largest loan linked to the acquisition in more than a year, with commitments on the $ 4 billion offer matures. Tuesday The already tight universe of troubled debt will shrink even further after Voyager Aviation reaches a restructuring deal that involves swapping debt for stocks, new securities and cash. click here for the New Issue Monitor To find out more, click here for the Credit Daybook Americas
According to a Bloomberg survey, SSAs will likely retain their dominance in the European syndicated bond market this week, extending this year’s first run for the sector.
The European Financial Stability Fund (EFSF) and BNG Bank NV are among seven issuers expected to price bonds totaling at least € 7 billion on Monday takes another step forward on Monday with the reopening of non-essential retailers; Yet UK credit looks expensive overall after a significant rebound from last March’s massive sell-off amid soaring business confidence The vaccination campaign in Europe may be plagued by delays, communication errors and fake not, but in the markets at least investors are united in betting the pandemic is on its way outside
Ethical bonds could be the flavor of the week for Asian issuers, especially Kia Corp. greenbacks. and China Water Affairs.
Individual investors in India are rushing to buy corporate bonds from weaker borrowers, taking greater risks to boost returns in a debt market dominated by institutional investors Regardless of the asset class, the outlook is turning gloomy for Chinese financial markets. The country’s stocks, bonds and currencies lose their luster after an impressive start to the year
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