Finnair issues EUR 120 million hybrid bond

The coupon rate of the bond is 8.875% per annum. The bond has no maturity but the company may exercise an early redemption option after four years. The settlement date of the bond is 26 November 2012. The hybrid bond was significantly oversubscribed and was allocated to more than 60 investors.

“We are pleased to have successfully issued a new hybrid bond. We are especially delighted about the strong demand from domestic investors, which indicates clear investor confidence in Finnair and its ability to pursue its strategy successfully in the prevailing challenging market environment,” says Finnair CFO Erno Hildén.

The issuance of the hybrid bond was subject to a sufficient amount of tenders for the currently outstanding hybrid bond. As disclosed in Finnair’s stock exchange release yesterday, the tender offer is due to expire at 2 pm EET on 21 November 2012, but Finnair has already received a sufficient amount of tenders to proceed with the issuance of the new hybrid bond.

A hybrid bond is an instrument which is subordinated to the company’s other debt obligations and which is treated as equity in the IFRS financial statements. A hybrid bond does not confer to its holder the right to vote at shareholder meetings and does not dilute the holdings of the current shareholders.

Nordea Markets is acting as coordinator and Nordea Markets and Pohjola Markets jointly as bookrunners in the transaction. Castrén & Snellman Attorneys Ltd acts as legal advisor to Finnair.