EasyJet follows BA in banking £1.4bn state-backed loan
James ChappleEasyJet has agreed a new five-year loan facility worth £1.4 billion with backing from the UK government.
The loan will be underwritten by a syndicate of banks and partially guaranteed by UK Export Finance – the UK’s export credit agency, which falls under the auspices of the government’s Department for International Trade.
In a note to the stock exchange, easyJet said the facility would, upon being drawn, be secured against its aircraft and would "significantly strengthen" its balance sheet by increasing available liquidity.
British Airways parent IAG confirmed a similar move last week, banking £2 billion backed by UK Export Finance’s export development guarantee.
Additionally, easyJet has announced that during Q1, it will repay and cancel part of its shorter-term debt, including a fully drawn revolving credit facility worth £370 million and term loans worth in the region of £400 million.
"This will free up a number of aircraft assets to further strengthen easyJet’s balance sheet," said the airline.
"As previously indicated, easyJet will continue to review its liquidity position on a regular basis and will continue to assess further funding opportunities, should the need arise," the note added.
EasyJet chief executive Johan Lundgren said: "This facility will significantly extend and improve easyJet’s debt maturity profile and increase the level of liquidity available.
"EasyJet has taken swift and decisive action, having now secured more than £4.5 billion in liquidity since the beginning of the pandemic.
"The loan facility, provided on commercial terms, reflects constructive and collaborative work between easyJet, multiple banks and UK Export Finance.
"With our unmatched short haul network and trusted brand, easyJet is well positioned as customers return to the skies in 2021."
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