(Sharecast News) – Budget airline easyJet has strengthened its balance sheet by signing a new five-year $1.87bn (£1.4bn) term loan facility.
The carrier on Monday said the loan was underwritten by a syndicate of banks and supported by a partial guarantee from the UK government’s Export Development Guarantee scheme.
It will be secured on aircraft and will “significantly extend and improve easyJet’s debt maturity profile” and strengthen its balance sheet by increasing the level of available liquidity.
EasyJet added that it would repay and cancel $900m of short-term debt during the first financial quarter to “free up a number of aircraft assets to further strengthen (its) balance sheet”.
“As previously indicated, easyJet will continue to review its liquidity position on a regular basis and will continue to assess further funding opportunities, should the need arise,” the company said.
Chief executive Johan Lundgren said the new facility “will significantly extend and improve easyJet’s debt maturity profile and increase the level of liquidity available”. The airline has now secured more than £4.5bn in liquidity since the beginning of the pandemic.
“The Export Development Guarantee scheme for commercial loans is available to qualifying UK companies, does not carry preferential rates or require state aid approval, and contains some restrictive covenants including around dividend payments, however these are compatible with easyJet’s existing dividend policy.”
