EBRD backs debut bond issue by Aegean Airlines

By Olga Aristeidou

EBRD backs debut bond issue by Aegean Airlines

  • EBRD backs Aegean Airlines’ first bond issuance.
  • €22.5 million to support investment in staff training and working capital needs.
  • Strengthening Greece’s tourism sector.

The EBRD is supporting the maiden flight of Aegean Airlines on the bond market with a €22.5 million investment in the Greek flagship carrier’s successful debut 7-year €200 million bond issue.

The funds will finance investments in support of the Greek tourism sector.

The Aegean Airlines bond was the first corporate bond issued in 2019 by a Greek corporate, and the first local bond listed on Athens Stock Exchange since June 2018. 

This investment is part of the EBRD’s Greek Corporate Bonds Framework, developed to extend the Bank’s support for the local corporate bond market and to strengthen its long-term viability.

Aegean Airlines is Greece’s full-service airline carrier which currently operates a fleet of 61 aircraft providing scheduled and chartered services as well as cargo services across 153 destinations in 44 countries. Headquartered in Athens and listed on the Athens Stock Exchange, the company has a market capitalisation of over €550 million and is one of Greece’s blue chip corporates. It has been a member of Star Alliance since 2010 and has been named Europe’s best regional airline by Skytrax eight times in a row, including in 2018.

The EBRD funds will finance working capital needs and the construction of a new training centre at Athens International Airport, providing purpose-built classrooms as well as state-of-the-art flight simulators for the training needs of pilots and cabin crew.

Moreover, through this bond issue, Aegean will finance part of its re-fleeting programme, which is expected to deliver significant fuel and maintenance savings amid higher seat capacity. Aegean’s investments are expected to enhance the growth prospects of the Company, tourism in Greece and, consequently the whole country.

The EBRD's participation in the bond issuance is expected to boost market confidence and contribute to building scale and critical mass for locally listed bond issuances. This can demonstrate the use of a financial instrument that is not yet widely utilised by Greek corporates.

The EBRD launched its original Greek Corporate Bonds Framework in June 2017 and within twelve months successfully leveraged €760 million of listed bonds utilising 65 per cent of the total €100m volume. In June 2018, a new €185 million Greek Corporate Bond Framework II was approved.

The EBRD started investing in Greece on a temporary basis in 2015 to support the country’s economic recovery. To date, the Bank has invested €2.4 billion in 44 projects in the corporate, financial and energy and infrastructure sectors of the Greek economy.