Ryanair has secured a new source of low-cost funding towards an order for 180 new Boeing 737 aircraft.
The Irish no frills carrier borrowed €850 million at an interest rate of less than 2% in its first bond offering.
The seven-year bond sale, listed on the stock exchange in Ireland, secured orders of more than €6 billion.
Despite the seven-year bonds being fixed at just 1.875%, the offer was more than eight times over-subscribed, with investors keen for returns amid record low eurozone interest rates and sovereign yields.
Ryanair received a BBB+ credit rating from Standard & Poor’s and Fitch, earlier this year, making its the highest rated airline in the world.
“These ratings reflect the strength of Ryanair’s business model which has a long established track record of profitability, cash generation, and a very strong balance sheet with low levels of debt,” the airline said.
Chief financial officer Howard Millar said: “We are very pleased with the issue of our first ever euro bond for €850 million at 1.875% fixed for seven years.
“The bond was more than eight times over-subscribed which reflects very strong demand from investors right across Europe.
“Investors were attracted both by Ryanair’s BBB+ ratings from S&P and from Fitch, making us the highest rated airline in the world, and by the strength of Ryanair’s business model, which is strongly cash generative, with a long track record of profitability, and a superior balance sheet with low levels of leverage.
“This low-cost financing, along with our attractively priced Boeing order for 180 aircraft, will enable us to reduce our aircraft ownership costs, and pass these savings on to our customers by continuing to offer the lowest fares in Europe, while growing from 82 million customers to over 110 million per annum over the next five years.”