Air Baltic becomes latest junk issuer to shelve bond sale

 Air Baltic Corporation AS has decided against a planned bond issue, becoming the latest European company to shelve a junk debt sale as fears over a higher-for-longer interest rate environment and geopolitical turmoil unsettle markets.

The Latvian airlines carrier said in a statement issued on Oct. 11 that the financing condition for a redemption of its July 2024 bonds had not been met. In an announcement three weeks earlier, it defined the financing condition for the redemption as the “successful issue of new bonds.” 

Last month, the state-owned company said it had appointed JPMorgan Chase & Co. and Morgan Stanley to arrange a series of fixed income investor meetings ahead of a potential five-year bond issue. 

Air Baltic becomes the latest company to change its mind on a potential debt sale following similar withdrawals from Sweden’s Stena AB and France’s FNAC Darty. 

The company is also currently planning an initial public offering, and has hired STJ Advisors LLP and Superia Corporate Finance to advise on the deal. 

Spokespeople for Air Baltic and Morgan Stanley both declined to comment. A spokesperson for JP Morgan declined to comment and referred to the Oct. 11 statement.