International Airlines cancels proposed £250m British Airways bond issue after lack of demand

Shares in International Airlines Group have lost nearly 2% after a bond issue for its British Airways subsidiary failed to take off. Early in July the group said it hoped to raise £250m with its first secured bond, to be backed by its take-off and landing slots at Heathrow and its routes between London City Airport and New York. It said the final terms and timing would depend on investor feedback. But despite Moody's giving the bond an A3 grade rating, the feedback must have been negative. The company has just said it would not proceed with the issue: There was a lack of demand for this bond at a price which would compare with other financing alternatives. IAG's shares are currently down 3.1p at 157p.