IAG lifts 25 year bond issue to $325m, sets minimum coupon at 7.5%
IAG says the increased size of the issue follows strong indicated demand.
The 25 year bonds will have a minimum 7.5% annual coupon with the actual interest rate being set on or about December 13 at the higher of 7.5% or the margin of 3.78% above five-year swap rate.
Last month, when IAG first announced it was considering such a bond issue it had planned to issue $150 million.
Such issues are currently very popular. From the issuers' point of view, that's because ratings agencies treat them as equity for the first five years, after which they are likely to be redeemed. Standard & Poor's has rated the bonds "A-" - two notches below IAG's own "A+" rating.
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