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Deutsche Lufthansa AG has issued a 500 million euro unsecured hybrid bond, as announced on January 8. The bond offers an annual interest rate of 5.25% and has a 30-year term, with the first call date set for January 15, 2031.
Hybrid bonds are subordinated financing tools that rating agencies evaluate with a 50% equity credit due to their long-term nature. This issuance is expected to enhance Deutsche Lufthansa AG's rating profile further. In 2015, the company also issued a hybrid bond which will be refinanced early through this new transaction, with repayment planned for February 12, 2026.
Dr. Till Streichert, Chief Financial Officer of Deutsche Lufthansa AG, commented on the development: "The successful transaction at the start of the year highlights the capital market's confidence in our company and reaffirms our broad access to various financing instruments. The favorable market environment combined with strong investor demand enabled us to secure a placement at highly competitive financing terms. With a six-year term until first repayment date, this issuance complements our maturity profile perfectly."
