The Qantas Group has completed a new round of debt funding, securing $1.05 billion in additional liquidity to strengthen its position as it deals with the Covid 19 outbreak.
This debt has been secured against part of the Group’s fleet of unencumbered aircraft, which were bought with cash in recent years. The loan has a tenure of up to 10 years at an interest rate of 2.75 per cent.
This funding increases the group’s available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available. Seven of the group’s 11 wholly-owned Boeing 787-9s have been securitised against this funding.
The Qantas’ net debt position is now $5.1 billion, with no major debt maturities until June 2021. In line with the rest of the Qantas debt book, the new funding contains no financial covenants.
With a further $3.5 billion in unencumbered assets, Qantas retains flexibility to increase its cash balance.
Qantas Group chief executive Alan Joyce said: “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances.
Everything we’re doing at the moment is focused on guaranteeing the long term future of the national carrier, including making sure our people have jobs to return to.”