How Investors May Respond To Air France-KLM (ENXTPA:AF) Redeeming Its Subordinated Perpetual Bonds

• Air France-KLM recently announced it will redeem all of its outstanding deeply subordinated perpetual bonds at par plus accrued interest, with payment scheduled for November 24, 2025.
• Bondholders have until November 10, 2025, to convert or exchange their holdings for ordinary shares, an offer that can impact both the capital structure and ownership composition of the company.
• We'll examine how Air France-KLM's decision to redeem its subordinated bonds could reshape its investment narrative and financial flexibility.

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What Is Air France-KLM's Investment Narrative?

For Air France-KLM shareholders, the investment story revolves around the company’s ability to grow sustainably while managing persistent sector risks such as debt, regulatory change, competition, and cost volatility. The newly announced redemption of deeply subordinated perpetual bonds could alter the capital structure, potentially improving future interest costs and simplifying the balance sheet. While this move gives current bondholders a window to convert their holdings into shares, it may only marginally impact near-term catalysts such as earnings momentum, operational efficiency, and strategic moves like alliances or merger talks. Given the strong earnings turnaround, robust year-to-date share price gains, and fair value estimates that position shares as undervalued, the bond redemption doesn’t meaningfully shift the biggest risks or change the main drivers unless conversion uptake is unusually high. Current market analysis still holds: disciplined management and industry challenges remain front of mind.

But there’s a potential shift in ownership structure investors should be watching for. Air France-KLM's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.

Exploring Other Perspectives

Six members of the Simply Wall St Community estimate Air France-KLM’s fair value between €11.83 and €37.94 per share, showing a wide set of forecasts. These diverging opinions highlight how much expectations can differ when considering both current earnings strength and capital structure changes. Explore these perspectives to understand the range of possible outcomes.

Explore 6 other fair value estimates on Air France-KLM - why the stock might be worth just €11.83!

Build Your Own Air France-KLM Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Air France-KLM research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Air France-KLM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Air France-KLM's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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