Easyjet has confirmed its has signed a £1.4 billion five-year term loan facility through the government’s Export Development Guarantee scheme.
Similar to the £2 billion loan recently secured by IAG subsdiairy British Airways, the facility has been underwritten by a syndicate of banks “and supported by a partial guarantee from UK Export Finance”.
Easyjet said that the loan would be secured against aircraft “upon drawing”, and does not carry preferential rates or require state aid approval.
It does contain restrictions around dividend payments, but the carrier said that “these are compatible with Easyjet’s existing dividend policy”.
The airline has also confirmed that it will repay and cancel part of its shorter term debt to free up aircraft assets “to further strengthen Easyjet’s balance sheet”.
Last April the carrier secured a £600 million loan from the Covid Corporate Financing Facility, and drew down $500 million (£407 million) from its Revolving Credit Facility.
Last week Easyjet outlined plans to reduce its schedules during the latest national lockdown, while continuing to operate between key UK cities, as well as on a “small number of international routes”.
Commenting on the news Johan Lundgren, Easyjet CEO 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.”