DUBLIN, May 18 (Reuters) - Ryanair raised 1.2 billion euros ($1.5 billion) at a record low coupon rate in a five-year bond sale on Tuesday, as Europe's largest low-cost airline took advantage of favourable market conditions to bolster its finances.

The sale happened a day after the Irish carrier reported a record annual loss of 815 million euros as a result of travel restrictions linked to the coronavirus pandemic. Senior executives said on Monday that conditions were good to tap capital markets, though they noted there was no urgent need to raise funds.

Ryanair had 3.15 billion euros in cash at the end of March and unencumbered aircraft worth at least 7.3 billion euros, Chief Financial Officer Neil Sorahan said ahead of the bond issuance. Ryanair is one of the few airlines that has an investment-grade credit rating, with a BBB score from both S&P Global Ratings and Fitch Ratings.

"We are pleased with the success of our latest, low-cost, unsecured bond issue," Sorahan said in a statement. The sale was "keenly priced" at a coupon of 0.875%, he added.

It received demand of 5.2 billion euros, according to two lead managers.

Colm Rainey, head of UK and Ireland corporate debt capital markets at Citigroup, said the coupon was the lowest ever achieved by Ryanair in part due to the fact investors are keen on its management, cost discipline and sheer size and scale.

"Within this sector this is where you place your bets," Rainey said.

As concerns persist about how successfully the pandemic is being controlled, European travel companies including EasyJet , TUI Cruises and IAG have sold bonds to add cash to their balance sheets or refinance debt.

An investor presentation ahead of the Ryanair sale highlighted that the airline also has an 850 million euro bond maturing this June and 600 million pounds of borrowing under the Bank of England's Covid Corporate Financing Facility maturing in March 2022.

Ryanair said it had the funds for the repayments and planned to use the proceeds for general corporate purposes. The company has reduced the term of its bond offerings to five years since the start of the pandemic.

Group Chief Executive Michael O'Leary said on Monday that the airline had decided to tap the markets to capitalise on the "very favourable recovery story that I think is now apparent" ahead of the wider reopening of European aviation and very favourable financing rates.

In a previous memo, Ryanair said it had hired BNP Paribas, Citigroup and Commerzbank for the sale on Monday. ($1 = 0.8192 euros) (Additional reporting by Abhinav Ramnarayan; Editing by Rachel Armstrong, Barbara Lewis and Paul Simao)