Air Baltic - comment

Good for the bonds. Perhaps we were too rash in concluding that the €100m equity would have to be commercially viable. Only in July, Estonia's parliament dismissed a €14m offer from Latvia for a 10% stake. But Lithuania's Nausėda just left the door open, signalling that the state would need a lot of assurances and structural guarantees to represent its interests. Covering the three Baltic states is the way forward for Air Baltic anyway, and so perhaps that's exactly what needs to happen. And perhaps that would be more palatable to Estonia too. Receiving investments from all three states, all three in the same geopolitical predicament, would also in some way fend off any excessive competition from other ULCCs - possibly lending even more credence to an emerging business opportunity. If so, the states could be more inclined to buy in at a €500m valuation than a private investor would. We are not rushing out to buy the bonds on that bet, but for those stuck in them, there could be a silver lining.