Lufthansa, airports seek to raise cash as virus hammers travel

Germany’s biggest airline and two of its largest airport operators are seeking funds in the local Schuldschein debt market, even as the spread of coronavirus hammers travel demand.

Deutsche Lufthansa AG has started work a 200 million-euro ($223 million) deal, its second Schuldschein offering in a couple of weeks. Frankfurt airport operator Fraport AG and the manager of Dusseldorf airport are both seeking 75 million euros, according to separate people familiar with the offerings, who asked not to be identified because the market is private.

The trio of aviation offerings—against a backdrop of Lufthansa parking planes and cutting flights—underscores the resilience of Schuldschein demand from hundreds of local German lenders and increasing number of international investors. The solid appetite, which kept deals flowing during the 2009 global credit crisis, is also helping to fuel the product’s expansion beyond its traditional German heartland.

“Schuldschein once more proves its robustness in times of turmoil,” said Sebastian Zank, executive director at Scope Ratings. Lufthansa’s short 400-day deal length also “demonstrates the ease and flexibility of the Schuldschein over public bonds or syndicated loans,” he said.

Lufthansa is a regular issuer of Schuldschein, a document-light promissory note that combines elements of loans and bonds. The airline raised at least 950 million euros via two deals last year. A spokesperson for the airline didn’t reply to Bloomberg News questions about the latest offering.

Fraport sold two Schuldschein last year, totaling 540 million euros. Refinancing is a “regular part” of business, the company said, while declining to comment specifically on its latest offering. Dusseldorf operator Flughafen Duesseldorf GmbH didn’t reply to emailed requests for comments on its sale.

The Lufthansa and Fraport sales are both due to settle in the week starting March 30. Dusseldorf airport will follow the week after.