Moody’s gives A2 to Airbus exchangeables

Moody's Investors Service said it assigned an A2 rating to the new euro-denominated exchangeable zero-coupon bonds due 2021 to be issued by Airbus Group SE.

The outlook is stable.

In conjunction with the debt offering, the agency expects Airbus will realize more than €2 billion of incremental value by monetizing its remaining 23.6% stake in unrated Dassault Aviation. The company will sell a 5.5% stake back to Dassault directly, with another 9.05% sold to investors in an accelerated block sale, and the remaining 9.05% underpinning the €1 billion exchangeable notes.

"The transaction allows the company to immediately monetize another sizeable piece of this high-value albeit minority stake in an unrelated entity, on an economically attractive basis, while maintaining an ongoing dividend stream over the interim period and prospective upside appreciation on the rest, with the noteworthy ability to offload shares in satisfaction of the new debt even if the (37.5% premium) exchange price is never achieved," Russell Solomon, Moody’s senior vice president and lead analyst for Airbus, said in a news release.

"Net proceeds will also notably be retained by the company to support ongoing operations, further bolstering an already strong liquidity profile and allowing the company to deal with some near-term challenges that we expect to be well-managed over the coming 2016-17 transitional period."

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