TfL Taps Bond Market After London Strikes, Seeks £250mln Deal

Transport for London is selling its first bonds in a decade, after strikes by Tube workers shut down most of London's underground lines. The company is seeking to sell a pound-denominated 16-year bond at about 80 basis points over gilts. Investor orders exceed £1 billion for the benchmark-sized deal, which is typically £250 million. The bonds are expected to be rated AA- by S&P Global Ratings and Fitch Ratings. HSBC Holdings Plc is leading the sale alongside NatWest Markets and Sumitomo Mitsui Banking Corp.

Transport for London (TfL) has returned to the bond market after a decade-long hiatus, following recent strikes by Tube workers that disrupted London's underground lines. The company is seeking to sell a pound-denominated 16-year bond, with investor orders exceeding £1 billion for a deal typically sized at £250 million Transport for London Taps Bond Market for First Time in a Decade^[1].

The bond, due in October 2041, is expected to be rated AA- by both S&P Global Ratings and Fitch Ratings. HSBC Holdings Plc is leading the sale alongside NatWest Markets and Sumitomo Mitsui Banking Corp. The company last raised bonds in April 2015 Transport for London Taps Bond Market for First Time in a Decade^[1].

The strike action by Tube workers earlier this month saw significant disruption to London's travel network, with many lines suspended for most of the week. The strike was sparked by a proposal by the RMT labor union to reduce the contractual 35-hour working week, which TfL argued was not affordable Transport for London Taps Bond Market for First Time in a Decade^[1].

The bond sale is a significant move for TfL, which has been facing financial challenges in recent years due to the impact of the COVID-19 pandemic and the ongoing strikes. The bond sale is expected to provide the company with much-needed funding to support its operations and infrastructure projects.