British Airways has clinched a £1 billion loan as the aviation sector seeks to rebuild back from the Covid-19 pandemic.
Parent company International Airlines Group (IAG) disclosed that agreement had been reached with UK Export Finance (UKEF) and a syndicate of banks.
The deal is for a five-year export development guarantee committed credit facility of £1 billion.
This is additional to a £2 billion UKEF guaranteed facility that was announced in December 2020 and drawn in March 2021.
BA intends to draw down “only if and when required” and the facility will not be utilised upon signing.
Similar to the previous facility, BA is entitled to repay any drawn loan at any time on notice and there are similar non-financial covenants, including restrictions on dividend payments to IAG.
Both facilities have similar “sustainability-linked” features.
IAG’s total liquidity was €10.6 billion at the end of September.
“This facility further bolsters liquidity,” the group said.
IAG will update investors and analysts in its third quarter results announcement on November 5.