BAA issues €500m bond

The UK airports operator has issued a new bond worth €500m with a 2016 maturity and a coupon of 4.12%. The company plans to use the proceeds to refinance existing debt.

BAA, the UK airports operator owned by Spanish infrastructure group Ferrovial, has issued a new bond worth €500 million, the company said in a statement.

 The bond will mature in 2016 and pays a fixed annual interest coupon of 4.12 percent, BAA said, adding it plans to use the proceeds from the issue to refinance part of its existing debt commitments.

The bond price was set at 205 basis points over mid-swaps, with BAA saying it received orders of €2 billion from over 200 financial institutions for the issue.

According to Fred Maroudas, BAA's director of treasury: “The success of this Euro-denominated bond, which follows on from our well received sterling, index-linked and class B bonds and our recent £625 million Class B bank facility, further demonstrates BAA's ability to attract a wide range of investors to fund our long-term investment plans at Heathrow.”

Last month BAA successfully refinanced £1.5 billion (€1.79 billion; $2.3 billion) of debt using new bank facilities and proceeds from a previous bond issue.

Ferrovial acquired BAA in 2006 for an enterprise value of £16 billion. BAA reported a pre-tax loss of £279 million during the first half of 2010, down from a £545 million loss posted in the previous comparable period.