Virgin Australia will be hosting an afternoon tea on Monday about the debt that it plans to list in Australia after it priced a $US425m, five-year senior unsecured note issue late last week.
The meeting will be held at the Sydney offices of investment bank UBS, with chief executive Paul Scurrah in attendance.
On Friday, Virgin told the market that its US bond issue was priced on October 24, with the $US425m aggregate principal amount of unsecured notes due on 2024. Settlement is expected on November 7.
The proceeds are being used to fund the acquisition of Virgin’s frequent flyer business, Velocity.
Virgin purchased the 35 per cent stake from Affinity Equity Partners for a price valuing Velocity at $700m.
As part of the funding strategy for the acquisition, Virgin Australia also intends to make an offer of Australian denominated notes to be listed on the ASX in the near term, subject to market conditions.
Virgin had earlier hired Morgan Stanley, UBS and HSBC to embark on a high yield debt issue in the United States, as reported by DataRoom on October 3.
It comes after ratings agency S&P Global on Friday ascribed a ‘B’ rating to Virgin Australia on Friday on the back of the US raise.
“In our opinion, full control of Velocity will somewhat benefit the group’s earnings profile and discretionary cash flow,” the ratings agency said.
Virgin last reported that its net debt was around $3.97bn, with some considering the level as high, at 4.7 times its earnings.
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