Jet2 has announced the successful pricing and final terms of its £387.4 million offering of guaranteed senior unsecured unrated convertible bonds due 2026.
The convertible bonds will be initially guaranteed by Jet2.com Limited and Jet2holidays Limited, while the terms and conditions will provide for provision of guarantees by other subsidiaries of Jet2 and the release of existing guarantors in certain circumstances.
The convertible bonds will be issued in principal amounts of £100,000 each and will carry a coupon of 1.625% per annum. The bonds will be convertible into new and/or existing ordinary shares of the company. The initial conversion price is set at £18.06, representing a premium of 40% above the reference share price of £12.90 which is equal to the placement price of an Ordinary Share in the Concurrent Delta Placement. The conversion price will be subject to adjustment in certain circumstances in line with market practice.
Settlement and delivery of the Convertible Bonds is expected to take place on 10 June 2021.
The joint global coordinators – Barclays, HSBC and Jefferies – and Canaccord Genuity have organised a simultaneous placement of existing Ordinary Shares (the "Concurrent Delta Placement") on behalf of certain subscribers of the Convertible Bonds who wish to sell those Ordinary Shares in short sales to purchasers procured by the joint global coordinators and Canaccord Genuity in order to hedge the market risk. The placement price for the short sales in the Concurrent Delta Placement has been determined via an accelerated bookbuilding process that was carried out by the joint global coordinators and Canaccord Genuity. The company and the Initial Guarantors will not receive any proceeds from any sale of Ordinary Shares in connection with the Concurrent Delta Placement.
Application is intended to be made for the Convertible Bonds to be admitted to trading on the unregulated open market (Freiverkehr) of the Frankfurt Stock Exchange after the Closing Date but prior to the First Interest Payment Date.
Jet2 has agreed to a customary lock-up, ending on the date falling 90 days after the closing date, subject to customary exceptions and to waiver by the joint global coordinators.
Barclays, HSBC and Jefferies are joint global coordinators and joint bookrunners, while Canaccord Genuity and Lloyds Bank Corporate Markets are acting as co-lead managers for the offering. Canaccord Genuity is also acting as joint bookrunner for the Concurrent Delta Placement.
N.M. Rothschild & Sons is acting as financial adviser to Jet2.
In addition to the convertible bonds and the company’s existing revolving credit facility, Jet2 has also signed a new unsecured £150 million term loan maturing in September 2023 as further liquidity to enhance its balance sheet capability and flexibility.
“These transactions together, further improve the ability for Jet2.com and Jet2holidays to capitalise on any upturn opportunities, benefiting all stakeholders, including shareholders,” said the company.