Japan Airlines sets terms for JPY178.9bn subordinated bonds

Japan Airlines (TSE:9201) announced the finalized terms for its public offering of perpetual subordinated bonds, totaling JPY 178.9 billion. The offering is split into two tranches: a JPY 150 billion tranche with an initial interest rate of 3.218% and a JPY 28.9 billion tranche with an initial interest rate of 4.124%. Interest payments can be deferred at the company’s discretion. The bonds, classified as equity financial instruments, will be subordinated to other debt in liquidation or bankruptcy proceedings. The proceeds will partially fund capital investments in new aircraft, including Airbus A350 and Boeing 787 models. Pricing was determined April 10, 2025, with payment scheduled for April 16, 2025. The initial optional redemption dates are set for April 16, 2030, and April 16, 2035, respectively, after which interest rates will step up.