Friday, February 05, 2021
Release of pledged aircraft
Lufthansa repays KfW loans early
With the help of another bond on the capital market, Lufthansa is repaying loans earlier than planned that the financially troubled airline had taken out with the state-owned KfW bank last year. According to the company, this means that it can freely dispose of pledged aircraft again.
Lufthansa, which was badly hit by the Corona crisis, has once again obtained fresh money through another bond. As the group announced, the bond with a total volume of 1.6 billion euros enables the early repayment of a loan from the state KfW promotional bank. With this, as well as with the funds already raised in the second half of 2020 totaling 2.1 billion, "the refinancing of all financial liabilities due in 2021 in the amount of around 2.6 billion euros is guaranteed".
According to Lufthansa, the early repayment of the KfW loan in the amount of one billion euros now means that the group can again freely dispose of pledged aircraft that were used to secure the loan.
As a result of the drastic collapse in air traffic during the corona pandemic, Lufthansa is under pressure to significantly reduce its costs. Last year, the airline, which is supported in the pandemic by a government rescue package worth nine billion euros, raised 1.6 billion euros through bonds and 500 million euros through aircraft financing, including so-called "sale and lease back" financing where assets such as aircraft are sold and then leased back.
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