* Airline seeks rating to gain direct access to debt markets
* Exec says would be interested in euro version of EETC
DUBLIN Jan 20 Ireland's Ryanair is
looking at tapping capital markets directly for the first time
as it prepares to take delivery of recently ordered Boeing
aircraft, a senior executive said on Monday.
Europe's largest airline by passenger numbers has raised
funds in the past through bonds backed by the U.S.
government-owned ExIm bank, but is in the process of seeking a
rating to gain direct access to the debt markets.
"We are putting ourselves in a position to allow us access
to capital markets. We have done it using U.S. government export
credit...(but) we haven't raised any money on Ryanair's book in
debt markets," corporate treasurer James Dempsey told Reuters.
Among options on the table, Ryanair is exploring whether to
use a rare euro-denominated version of Enhanced Equipment Trust
Certificates (EETC), a dollar-denominated funding structure
popular with U.S. airlines and gradually being adopted abroad.
"We tend to value our aircraft owned in euros and we are in
the euro zone," Dempsey said, speaking on the sidelines of an
Airline Economics conference in Dublin.
"If you take a U.S. capital markets product, we have to swap
that back (from dollars). So we prefer to raise the money in
euros. That is something we would be very interested in," he
So far, only Air France has used euro-denominated
EETC instruments, conference delegates said.
EETCs, a critical source of funding for U.S. carriers, are
attractive because the planes -- the carrier's main long-term
asset -- are put into a special-purpose trust to protect
investors in case of an airline default or insolvency.
Such structures from non-US carriers are more rare.
Asked about the timing of a possible debt-market debut,
Dempsey noted that the first of 175 recently ordered Boeing 737s
would not be delivered until late this year.
Ryanair ordered the current-generation jets last year,
taking advantage of attractive discounts as Boeing prepares to
switch to a more efficient 737 MAX model, due out from 2017.
It has however said it is interested in ordering the MAX as
it seeks to expand passenger numbers by 50 percent by the end of
Dempsey declined to comment on those negotiations, but
indicated that the airline did not feel under pressure to make a
quick decision due to Boeing's long waiting list. Most 737 MAX
production slots are sold out until late-decade.
"The fact that the (737 MAX) aircraft is coming in 5, 6, 7
years' time makes it a lot easier to say that there is only one
aircraft available today ... rather than the 13 percent (gain
in) efficiency that will come in 2018," Dempsey told delegates
at the conference, part of a week of air finance meetings.
Airlines have been upgrading to the re-engined 737 MAX or
the competing Airbus A320neo amid high fuel prices.