The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

PFI: AirTanker decision fuels bond market gloom

UK PFI deal taps loan market for entire £2.2 billion.

Capital markets make a U-turn for AirTanker

Capital markets make a U-turn for AirTanker

At £2.5 billion ($4.98 billion), the AirTanker deal (which will fund new aircraft for the Royal Air Force) is a very big transaction by public finance initiative standards, and not to tap the bond and bank markets would have been unthinkable this time last year. But it seems that a rethink on the size of the bond tranche was on the cards as early as August 2007, when the crisis in the credit market first began to bite. By the New Year, as it became very clear that the monoline guarantors faced serious difficulties, plans to include both bond and loan tranches in the deal were abruptly scrapped by sponsors Cobham, EADS, Rolls-Royce, Thales UK and VT Group. A group of seven banks was then swiftly assembled to arrange a £2.2 billion loan. This is an understandable if comprehensive U-turn from the sponsors, which were planning to finance the majority of the deal in the bond market, with a smaller portion funded in the loan market via HBOS.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree