March 8, 2019 / 12:47 PM / 8 months ago

UPDATE 1-Aegean Air sells bond, raises 200 mln euros for fleet renewal

* EBRD backs Aegean’s debut bond issue

* Seven-year paper will pay a 3.6 pct coupon

* Issue 2.6 times oversubscribed (Adds EBRD take up of bond)

By George Georgiopoulos

ATHENS, March 8 (Reuters) - Greece’s largest carrier Aegean Airlines has raised 200 million euros ($224.20 million) from an oversubscribed bond offering, the banks leading the deal said on Thursday.

Aegean, a member of the Star Alliance airline group, will use 75 percent of the proceeds to partly finance down payments to renew its fleet of single-aisle planes and add capacity for future expansion.

Aegean picked Airbus last March for an order of up to 42 aircraft worth $5 billion, marking one of the biggest investments by a private Greek company since the country’s debt crisis erupted in 2010.

The bond, which will pay a 3.6 percent coupon, was 2.6 times oversubscribed with 60 percent of the issue allocated to private investors.

The European Bank for Reconstruction and Development said it invested 22.5 million euros in the offering, the first Greek corporate bond issued this year.

“The EBRD’s participation in the bond is expected to boost market confidence and contribute to building scale and critical mass for locally listed bond issuances,” the EBRD said.

“This can demonstrate the use of a financial instrument that is not yet widely utilised by Greek corporates.”

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

Aegean plans to use 14 percent of the proceeds or up to 27.5 million euros to build a new 12,000 square metre training centre with flight simulators for its flight crews at the Athens International Airport (AIA).

About 11 percent of the proceeds or up to 21.6 million will be used as working capital.

Piraeus Bank and Eurobank were joint coordinators and bookrunners for the issue, with Alpha Bank and Euroxx Securities the lead underwiters. Euroxx Securities was also advised on the deal. (Reporting by George Georgiopoulos; editing by Emelia Sithole-Matarise and Kirsten Donovan)

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