Qantas Airways Limited
Information Memorandum dated 17 March 1999
Dated 12 May 2014
Nature of the bonds
Direct, unconditional, unsecured debt obligations of the Issuer which rank equally among themselves and at least equally with the Issuer’s other unsecured debt obligations (except for debt mandatorily preferred by law).
7.75% per annum, payable semi-annually (in two coupons of 3.875%) in arrears on 19 May and 19 November in each year, including the Maturity Date, subject to adjustment upwards by a maximum of 1.5% per annum, should Qantas’ credit ratings fall below certain levels.
Repayment at par on the maturity date
On the Maturity Date, bondholders are scheduled to receive the Face Value and the final Coupon Payment for the last Interest Period.
Key benefits include:
- interest paid semi-annually in arrears;
- interest paid as 100% cash;
- interest is not deferrable nor are interest payments discretionary;
- rank equally with all other senior and unsecured creditors of the Issuer.
The value of an investment in Qantas Bonds may fluctuate due to various factors, including investor perceptions, worldwide economic conditions, interest rates, debt market conditions and factors that may affect Qantas’ financial performance. The following risks may also affect an investment in Qantas Bonds:
- Credit Risks – Associated with the Issuer and any Guarantors;
- Liquidity Risk – An active secondary market in respect of the Bonds may never be established or may be illiquid and this would adversely affect the value at which an investor could sell the Bonds;
- Interest Rate Risk – The value of Fixed Rate Bonds may be adversely affected by movements in market interest rates;
- Regulatory Risks – The aviation industry in Australia is highly regulated, which can limit Qantas’ flexibility and may adversely affect its financial performance
- Litigation Risks – Risks relating to litigation and regulatory actions;
- Default Risk – If an event of default occurs under the Bonds, or Qantas fails to perform any obligation in relation to the Bonds, such event or failure may impact on the value of an investment in the Bonds, the transferability of the Bonds and the ability of a holder to recover amounts due under the Bonds.
Early redemption by issuer
Early redemption by bondholder
Bondholders can require the Issuer to redeem the bonds at par (100%), where there has been a Change of Control (e.g. an entity gains control of the Issuer) and a credit rating downgrade of the Bonds below a certain rating.
Events of default
Events of Default include:
- Failure to Pay: Applicable with a 2 Business Day cure period;
- Breach of other obligations: Applicable, with a 30 day cure period;
- Insolvency: Applicable;
- Cross default: Applicable with Threshold Amount of A$ 25,000,000;
- Enforcement: Applicable with Threshold Amount of A$20,000,000;
- Unenforceability: Applicable, with a 30 day cure period.
- The Issuer ceases to carry on business as an airline.
Coupon Schedule to Maturity
- 19 May 2017
- 19 November 2017
- 19 May 2018
- 19 November 2018
- 19 May 2019
- 19 November 2019
- 19 May 2020
- 19 November 2020
- 19 May 2021
- 19 November 2021
- 19 May 2022 - Maturity Date