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British Airways Gets Commitments For UKEF Guaranteed 5-year Loan Facility - Quick Facts

International Airlines Group S.A. (IAG.L) said Thursday that British Airways has received commitments for a 5-year term-loan Export Development Guarantee Facility of 2.0 billion pounds underwritten by a syndicate of banks, partially guaranteed by UK Export Finance or UKEF.

UKEF, the UK's export credit agency, provides the Export Development Guarantee to support the working capital as well as capital expenditure needs of UK exporters upon meeting certain criteria.

IAG said British Airways expects to drawdown the facility in January 2021, subject to agreement of final terms with the lenders and UKEF.

British Airways will use the proceeds from the UKEF facility to strengthen its liquidity and provide it with the operational and strategic flexibility to take advantage of a partial recovery in demand for air travel in 2021 as COVID-19 vaccines are distributed worldwide.

British Airways can repay the loan at any time on notice. However, the arrangement contains some non-financial covenants, including restrictions on dividend payments by the airline to IAG.

IAG noted it has strong liquidity, with cash and undrawn facilities of 8.0 billion euros as at 30 November, excluding the UKEF facility. In addition to the UKEF facility, IAG is exploring other debt initiatives to further improve its liquidity.

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