Debtwire is reporting VistaJet Malta Finance PLC and XO Management Holding Inc., units of Dubai-based Vista Global Holdings, successfully sold $550 million in senior unsecured bonds earlier this week. The news service, which covers the worldwide debt market, said Vista had to increase the coupon of the deal due to investor concerns about the cyclical nature of private aviation and UHNW spending during a downturn.
Paula Seligson, a reporter with Debtwire who wrote the story said overall the deal is positive news for Vista Global. She said the funds which will be used to refinance two pieces of debt due in 2020 and 2021, and it means the company now doesn’t have any more major refinancing obligations until 2024. She said companies typically refinance debt one to two years before it is due, so the timing of the bond offering was typical.
“It’s definitely a good thing,” Seligson told Private Jet Card Comparisons.
Marketing material promoting the bonds showed Vista Global is projecting a consolidated EBITDA of $353 million in 2019. After interest payments and capital expenditures, the group would have a free cash flow of $188 million, according to Debtwire.
However, Seligson noted the company also expects to pay approximately $200 million per year additionally for the next four years in aircraft financing expenses, implying a negative cash flow of approximately $12 million based on its 2019 forecast. She said the company didn’t disclose what type of flexibility it might have on those payments.
The offering also reveals some details of Vista Global’s ownership. The report puts Vista Global chairman Thomas Flohr’s ownership at 86.6% with Rhone Capital holding a 12.9% stake. Rhone Capital had previously agreed to invest at least $150 million in VistaJet.
Vista Global argued that it is positioned to survive any market dives. “Our resiliency through downturns was evidenced by our revenue being flat through 2008 and 2009, and our revenue and hours flown having increased every year since then, despite various headwinds during certain time periods,” the company wrote in the deal documents.
VistaJet offers a jet card program requiring buying at least 50 hours per year with a three-year commitment and hourly rates ranging from $12,000 to $18,000 on its fleet of super-midsize and large-cabin jets.
XOJET offers several card membership programs, including a broker program on light and midsize jets, and a super-midsize jet card predicated on its owned fleet of Challenger 300s and Citation Xs. XOJET programs start at $50,000. It also has a sizeable brokerage for on-demand charter thought to exceed $100 million in annual revenues.
Vista Global has previously said it wants to expand the XOJET outside the United States. Last month it announced an agreement to acquire JetSmarter, the troubled seat sharing broker in a play for its technology platform. Executives at Vista Global didn’t respond to a request for comment.