Vista Group issues $500m 9.5% bond


VistaJet fleet

Vista Group has issued a $500m five-year bond to repay existing debt.

The bond has a 9.5% coupon. It priced at 99.998 giving it a 9.75% yield. Jefferies, Bank of America, Standard Chartered and Citi were bookrunners.

It was oversubscribed attracting strong interest from pension funds and other institutional investors. The cash will be used to repay a mix of debt including aircraft loans. It was issued by VistaJet Malta Finance and Vista Management Holding. The senior notes were rated B3 by Moody’s – an upgrade – bringing it in line with Fitch and S&P who rated it B-.

Moody’s also raised the rating on existing bonds issued by VistaJet Malta Finance and Vista Management Holding from Caa1 to B3.

The B3 corporate family rating reflects the company’s strong position in the market for corporate jet travel; significant contracted revenue from a diversified customer base; and high aircraft utilisation rates, which enable a relatively cost-efficient business aviation solution for its customers, said Moody’s in its rating action.

Moody’s said that Vista Global is still exposed: “to cyclical demand; a competitive and highly fragmented market; its high leverage, with Moody’s-adjusted debt/EBITDA at 7.8x in 2022 [7.2x including the impact from monetisation of Put Options]; the risk of further debt-funded growth and the company’s liquidity occasionally hampered by quarterly debt repayments.”

The rating agency said that Vista Global’s sales hit $2.5bn in 2022 up from $1.6bn in 2021. Vista Global bought Air Hamburg and Jet Edge in 2022 and also took delivery of 11 new Bombardier Global 7500s and eight new Challenger 350s. This meant that Vista Global’s debt rose from $2.5bn in 2021 to $4.9bn in 2022.

In the rating action it said that it expects Vista Global’s Moody’s-adjusted Debt/EBITDA to decline to around 5.5x by year-end 2023. It expects free cash flow to breakeven in 2023 after several years of negative cash flow after acquisitions. Moody’s does not expect the company to place new orders in the next two years or pay a dividend to Thomas Flohr: its majority investor or Rhone Capital.

Vista financials – at a glance

  • Upgrades: VistaJet Malta Finance (co-issuer: Vista Management Holding) Upgraded to B3 from Caa1 
  • Outlook Actions: Vista Global Holding changed to positive from stable; VistaJet Malta Finance changed to positive from stable
  • Affirmations: Vista Global Holding probability of default rating, affirmed B3-PD; Vista Global Holding Corporate Family Rating, affirmed B3.