...September 20, 2021 FRANKFURT (S&P Global Ratings) Sept. 20, 2021--S&P Global Ratings said today that the 2.14 billion fully underwritten equity issuance announced by Deutsche Lufthansa AG (Lufthansa; ##-/Negative/B) will increase the airline's headroom under our current rating. Lufthansa aims to use the cash proceeds mainly to repay state-backed aid that was approved by its shareholders and the European Commission in June 2020 and provided by the Economic Stabilization Fund. Specifically, the airline plans to repay 1.5 billion of outstanding drawings under a tranche of hybrid capital dubbed Silent Participation I, which we regard as akin to debt, according to our hybrid criteria. While the issuance will reduce Lufthansa's S&P Global Ratings-adjusted debt, it is neutral for the airline's liquidity. Lufthansa reported a cash balance of 6.7 billion as of June 30, 2021. That said, given the slow recovery of air traffic, we expect the airline will deploy just 40% of its pre-pandemic capacity...
