Transaero Airlines, the country's second-largest air carrier with more debt than its bigger state-run rival Aeroflot, is investing to equip jets with Internet access in a push that's sent borrowing costs soaring.
Transaero sold 2.5 billion rubles ($85 million) of bonds to install the system on March 2, paying a yield of 12.5 percent for debt redeemable next year. That's 1 percentage point more than the company paid for four-year notes in its last financing in October 2009.
The technology push may lift the ratio of Transaero's debt to earnings before interest, tax, depreciation, amortization and rent, a solvency measure for airlines, above its current 11.7, compared with 2 for Aeroflot, according to Raiffeisenbank. Transaero's yield is the highest offered to investors in new ruble debt since August, data compiled by Bloomberg show.
(Bloomberg)
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
