daa gets timing right for bond market return after 8 year gap
The operator of Dublin Airport undertook a key financing transaction which allowed it to retire an older bond issue early and put in place competitively priced financing for the expansion of its operating facilities.

The Finance Dublin Debt Capital Markets Refinancing Deal of the Year went to daa plc's €400 million tender offer and new note issuance, undertaken through its wholly-owned financing vehicle daa finance plc. This was daa’s first return to the debt capital markets since its €600 million 6.587 per cent issue in 2008 and marked the second euro issuance of any Irish corporate in 2016.

This was a key financing transaction by daa which allowed it to retire an older bond issue early and put in place competitively priced financing for the expansion of its facilities at Dublin Airport.

As an Irish semi-state issuer the transaction was significant in the context of the long-term financing by daa of its airport facilities. Within that, there are significant peculiarities about the corporate mandate of the daa and the legislative framework within which it operates which had to be considered.

The tender offer was by daa finance plc for its €600 million 6.5872 per cent notes due 2018. The issuance was of €400 million 1.554 per cent notes due 2028, guaranteed by daa plc (formerly Dublin Airport Authority plc). The 12 year bond was issued with a spread of MS+85bps and the notes were assigned a long-term public credit rating of A- by S&P.

The transaction was well supported on the back of a three day European roadshow which included meetings with a broad range of investors in London, Munich, Frankfurt, Paris and Amsterdam. This successful bond issue and buy-back extended the average maturity of daa’s long term debt at historically low interest rates. One important feature of the deal was that it was done under Irish law.

Cormac O’Reilly of BNP Paribas said: 'The transaction was well timed, being only the second issuance by an Irish corporate in 2016 and shortly following an Irish sovereign rating upgrade by Moody’s. This was an excellent example of an issuer securing a stable pre-Brexit vote window and making a successful return to the European bond market after eight years.'

Peter Walker, Partner and Head of Debt Capital Markets at A&L Goodbody, said: This key financing transaction allowed the daa redeem and put in place competitively priced new financing for the expansion of its facilities at Dublin Airport.'

Cormac Kissane, Partner, Head of Finance at Arthur Cox, said: 'daa obtained long-term financing at very attractive rates. In addition, the bonds were governed by Irish law and the parties submitted to the jurisdiction of the Irish Court. This is very unusual for corporate bonds, which are usually governed by English law, and removes a large amount of cross border legal risk for daa.'

The banks and advisors on the deal were: Barclays Bank PLC, BNP Paribas and RBS (all joint booker runners); BNP Paribas Trust Corporation UK Limited (trustee) and BNP Paribas Securities Services, Luxembourg Branch (paying agent); Bank of Ireland; Danske Bank; Arthur Cox; A&L Goodbody; Davy; Goodbody; Linklaters LLP and NM Rothschild & Sons.
Publication Date:May 2017