Qantas Airways Ltd
Issuer ASX Code
Information Memorandum dated 7 November 2019
On or about 20 November 2019
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).
27 November 2019
27 November 2029
2.95% per annum, payable semi-annually (in two coupons of 1.475%) in arrears on 27 May and 27 November in each year, including the Maturity Date.
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.
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.
Key benefits include:
- 10 years remaining until Maturity Date;
- 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.
Early Redemption by Issuer
Yes, for tax reasons;
Yes, the Issuer may redeem all (but not some only) of the Notes before their Maturity Date on the Optional Redemption Date (or within 90 days of the Maturity Date) at their outstanding principal amount together with interest )if any) accrued to (but excluding) the Optional Redemption Date.
Where the Optional Redemption Date is 27 August 2029 (or within 90 days of the Maturity Date).
Early Redemption by Bondholders
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 5 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;
- The Issuer ceases to carry on business as an airline.
Coupon Schedule to Maturity
- 27 May 2020
- 27 November 2020
- 27 May 2021
- 27 November 2021
- 27 May 2022
- 27 November 2022
- 27 May 2023
- 27 November 2023
- 27 May 2024
- 27 November 2024
- 27 May 2025
- 27 November 2025
- 27 May 2026
- 27 November 2026
- 27 May 2027
- 27 November 2027
- 27 May 2028
- 27 November 2028
- 27 May 2029
- 27 November 2029 - Maturity Date