Garuda Leads Losses in Bonds of Asian Airlines Stung by Iran War

Bonds of Asian airlines, led by PT Garuda Indonesia, are showing strain from the Iran war, as higher fuel burdens compared with global peers amplify their vulnerabilities.

A note of state-controlled Garuda has dropped about 7 cents on the dollar since the start of the conflict to about 85.4, one of the biggest declines for any US-currency bond of an airline globally, according to data compiled by Bloomberg. The higher fuel costs are exacerbating the financial pressure on weaker borrowers that have smaller cash buffers and are grappling with rising funding costs too.