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German flagship carrier Deutsche Lufthansa AG sold new bonds worth €1.6bn ($1.9bn) on Thursday to partly repay bailout debt from the government taken to tide through the pandemic last year. It raised:
The bonds, expected to be rated Ba2/BB- in line with the issuer, received orders worth €2.6mn ($3.1bn), 1.6x issue size. Lufthansa said that it will use €500mn ($598mn) to refinance liabilities due this year and the balance to repay part of the €3bn ($3.59bn) loan from state development bank KfW, which was part of a €9bn ($10.76bn) rescue package agreed by the government in June last year. CEO Carsten Spohr said that he does not expect a return to pre-pandemic levels until 2024, adding to speculation that the company may need to sell or partially list its Lufthansa Technik maintenance division. The bonds carry a change of control clause as well as a clean-up call (80%) as per Bloomberg.