Lufthansa passes Ryanair test as local demand sends €500m bond ultra-tight

By Jon Hay
11 Sep 2014

Deutsche Lufthansa, Germany’s national airline, launched its first bond since 2009 on Friday September 5, at the remarkably tight spread of 75bp over mid-swaps — showing just how valuable a loyal following of domestic investors can be.

The deal was unusual in many ways. Most airlines are fairly complex credits, to put it politely — highly cyclical and, taking the industry as a whole, often unprofitable.

Lufthansa’s credit has been improving. Moody’s cut it from Baa3 to Ba1 in 2009, but changed its ...

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