Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Eads Considering 4 Bln Euro Bond Issue To Fund XWB  
User currently offlineBringiton From United States of America, joined Sep 2006, 866 posts, RR: 0
Posted (7 years 9 months 5 days 3 hours ago) and read 2457 times:

Read here -



http://www.forbes.com/business/feeds/afx/2006/11/29/afx3211629.html

14 replies: All unread, jump to last
 
User currently offlinePoitin From , joined Dec 1969, posts, RR:
Reply 1, posted (7 years 9 months 5 days 3 hours ago) and read 2432 times:

Should be interesting to see if this is a public offering or "private". And if public, what the bond rating will be in light of the A380 issues.

User currently offlineEddieDude From Mexico, joined Nov 2003, 7572 posts, RR: 43
Reply 2, posted (7 years 9 months 5 days 3 hours ago) and read 2382 times:

"EADS wants guarantees from the governments of Germany, France, Spain and the UK that they will acquire 30-40 pct of the bond issue."

Seems that a portion will be a private placement, the acquirors of which would be the aforementioned governments, while the portion corresponding to the remainder of the issuance could be either a public offering or a private placement with institutional investors only.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineBringiton From United States of America, joined Sep 2006, 866 posts, RR: 0
Reply 3, posted (7 years 9 months 5 days 3 hours ago) and read 2374 times:

I think Airbus is wanting the govts. to commit to about 40% while the others are available in the open market? Werent there talks of some Arab buyers interested ? I also wouldnt be surprised if China took some aswell !!

User currently offlinePoitin From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 9 months 5 days 3 hours ago) and read 2341 times:

Quoting EddieDude (Reply 2):
"EADS wants guarantees from the governments of Germany, France, Spain and the UK that they will acquire 30-40 pct of the bond issue."

True, and is that any different from "launch aid?"

That should cause a stir in Washington (both DC and state).


User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 5, posted (7 years 9 months 5 days 2 hours ago) and read 2281 times:

Quoting Poitin (Reply 4):
Quoting EddieDude (Reply 2):
"EADS wants guarantees from the governments of Germany, France, Spain and the UK that they will acquire 30-40 pct of the bond issue."

True, and is that any different from "launch aid?"

That should cause a stir in Washington (both DC and state).

It depends on the rate and repayment plan. If it is a market rate and mechanism, I am sure it's not really launch aid.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 6, posted (7 years 9 months 5 days 2 hours ago) and read 2250 times:

EADS are hoping for the governments to buy some of the bonds because it would bid up the price. Let us hope that the governments have the wisdom to insist that the bonds be bought only by private investors.

User currently offlineStitch From United States of America, joined Jul 2005, 30908 posts, RR: 87
Reply 7, posted (7 years 9 months 5 days 1 hour ago) and read 2178 times:
Support Airliners.net - become a First Class Member!

Quoting Zvezda (Reply 6):
EADS are hoping for the governments to buy some of the bonds because it would bid up the price.

And EADS might also be hoping the governments will be more...loose...on repayment terms (in other words, they expect full repayment, but will accept being behind the non-governmental investors) which I imagine will improve the willingness of those investors to invest and help keep the interest rate a bit lower.

All that being said, I don't expect Airbus to have to pay penurious interest rates, even with the damage their bottom line is going to be taking over the next four years. EADS strikes me as still a "safe bet", just as Boeing was back in the mid to late 1990s.


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 8, posted (7 years 9 months 5 days 1 hour ago) and read 2150 times:

Quoting Stitch (Reply 7):
I don't expect Airbus to have to pay penurious interest rates, even with the damage their bottom line is going to be taking over the next four years. EADS strikes me as still a "safe bet", just as Boeing was back in the mid to late 1990s.

Last I checked, EADS bond rating was still above junk.


User currently offlineStitch From United States of America, joined Jul 2005, 30908 posts, RR: 87
Reply 9, posted (7 years 9 months 5 days 1 hour ago) and read 2144 times:
Support Airliners.net - become a First Class Member!

Quoting Zvezda (Reply 8):
Last I checked, EADS bond rating was still above junk.

And so it should be, frankly.


User currently offlinePoitin From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 9 months 4 days 23 hours ago) and read 2073 times:

Quoting PolymerPlane (Reply 5):
It depends on the rate and repayment plan. If it is a market rate and mechanism, I am sure it's not really launch aid.

"Launch aid" is in the eyes of the beholder, and I suspect both Boeing and the US government will have blood in their eyes.

Quoting Zvezda (Reply 6):
EADS are hoping for the governments to buy some of the bonds because it would bid up the price. Let us hope that the governments have the wisdom to insist that the bonds be bought only by private investors.

Yes, I agree with you completely, yet somehow, I just don't think it will happen. "Too many jobs on the line."

Quoting Zvezda (Reply 8):
Last I checked, EADS bond rating was still above junk.

But sinking

http://www.channelnewsasia.com/stori...orld_business/print/236712/1/.html


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 11, posted (7 years 9 months 4 days 22 hours ago) and read 2024 times:

Quoting Poitin (Reply 10):
But sinking

EADS' sinking credit rating is an ineluctible result of the WhaleJet fiasco. Getting the A350 right is imperative.


User currently offlineGbfra From Germany, joined Sep 2006, 448 posts, RR: 0
Reply 12, posted (7 years 9 months 4 days 21 hours ago) and read 1947 times:

Governments can borrow at a lower rate than EADS. Therefore buying EADS bonds appears to be quite promising for them without spending taxpayers' money.

The credit ratings of EADS are not superb but they're not very bad either.

So you shouldn't exaggerate.



The fundamental things apply as time goes by
User currently offlineGlacote From France, joined Jun 2005, 409 posts, RR: 2
Reply 13, posted (7 years 9 months 4 days 18 hours ago) and read 1879 times:

1) Of course EADS credit rating is still above junk bonds (!).
2) Repayable loans are not launch aids nor free money like export tax breaks.
3) However they have one slight market impact - in that in the case of a defaults governments bonds usually are less senior (either explicitely or implicitely). This means in practice that private lenders should expect the loss to exceed 30% of the notional before themselves incurring their first dollar loss. This is a significant "credit enhancement".
4) Conditionnally repayable launch aid can be a huge strategic advantage in smaller markets. IT makes it possible to force all competitors to invest as heavily as you did (read: full CFRP Y3 + new engines) while you yourself still enjoy the allowance of loosing up to one third of your investment for free. This may (or not) incitate your competitors [em]not[/em] to enter that market until they themselves get better return-on-capital ratios.
5) It looks like France is the cause of the delay of the board which was suppose to greenlight the launch. Apparently the french government wants "more details" on the financing - like it would care about having confidence to get its money back in due time...


User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 14, posted (7 years 9 months 4 days 18 hours ago) and read 1850 times:

Quoting Glacote (Reply 13):
2) Repayable loans are not launch aids nor free money like export tax breaks.

It is cheaper money however.

Quoting Glacote (Reply 13):
3) However they have one slight market impact - in that in the case of a defaults governments bonds usually are less senior (either explicitely or implicitely). This means in practice that private lenders should expect the loss to exceed 30% of the notional before themselves incurring their first dollar loss. This is a significant "credit enhancement".

Not that slight. It reduces the risk of investing significantly from the private firm point of view. It could tilt the balance from not investing to investing, and thus the interest rate on the private bond issued.

Cheers,
PP



One day there will be 100% polymer plane
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Finance Ministry Reluctant To Fund PIA Fleet Plan posted Sat Feb 2 2002 17:15:47 by GF-A330
Airbus Lifts Eads To $2 Bln Profit posted Wed Mar 8 2006 17:28:36 by Solnabo
Eads In Talks To Sell Part Of Airbus posted Thu Nov 16 2006 07:41:00 by N1786b
Eads In Talks To Sell Part Of Airbus posted Thu Nov 16 2006 07:39:44 by N1786b
Eads Airbus To Cut Supplier Base By 80% posted Mon Nov 6 2006 20:49:46 by N328KF
China LoI 20 A350-XWB, "To Buy 150 A320" posted Thu Oct 26 2006 05:37:08 by PanAm_DC10
ATW: Airbus Considering Revisions, Delays To A350 posted Wed Oct 25 2006 07:48:30 by Leelaw
FI: Airbus To Ask Board To Approve A350 XWB posted Mon Oct 23 2006 10:21:23 by Leelaw
EADS's Airbus To Sell 5 German Plants To Investors posted Wed Oct 11 2006 08:03:42 by Columba
Northrop Grumman To Buy Shares Of Eads? posted Sun Oct 8 2006 16:52:52 by Columba