Support The Moscow Times!

Transaero Bonds Go to Wi-Fi

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.


Read more

The need for honest and objective information on Russia is more relevant now than ever before!

To keep our newsroom in Moscow running, we need your support.