British Airways owner International Airlines Group (IAG) raised USD 1.43 billion through a bond issue it said would help to see it through what could be a longer than expected pandemic-driven travel turmoil.

IAG, which also owns Iberia and Vueling in Spain and Aer Lingus in Ireland, last month said it had sufficient liquidity to ride out the crisis, but on Thursday the group decided to add to its war chest. Announcing final terms of the bond, IAG said that demand was higher than expected, enabling it to raise 1.2 billion euros, up from the 1 billion originally planned.

International Airlines Group, which is burning through about 185 million euros a week as a result of the pandemic, has been cutting costs while flying only 20% of its normal capacity. It said the proceeds could be used to withstand a more prolonged downturn or provide "flexibility to take advantage of a recovery in demand for air travel".

The senior unsecured bonds were issued in two tranches, with 500 million euros due in 2025 and 700 million euros due in 2029. They were priced at a yield of 2.75% for the first tranche and 3.75% for the second tranche.

In a low-rate environment and with economies set to reopen, bond investors have become increasingly keen to buy debt from well-known airlines because it is one of the few sectors still offering a high yield, a source familiar with the deal said.

Vistara expects regular short-haul international operations in the next 3-6 months.

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