SINGAPORE – Singapore Airlines has raised US $ 500 million (S $ 663 million) in its first US dollar-denominated bond issue, with final demand reaching more than US $ 2.85 billion, the company said Thursday January 14.
The oversubscribed issue was anchored by high-quality institutional investors, including real-money asset managers, SIA said.
Thanking investors for their “strong support,” CEO Goh Choon Phong said, “We are confident that this will further strengthen SIA’s competitive advantage in the industry and enhance our ability to emerge stronger from the challenges posed by the pandemic. Covid-19. ”
The five-year bonds, which bear an annual coupon of 3% per annum, will mature on July 20, 2026. They are expected to be issued on January 20, at an issue price of 99.573% of their principal amount. .
The proceeds from the bond issue will be used for aircraft purchases, related payments and other general purposes, including refinancing of existing borrowings.
SIA said the show “gives it the financial flexibility to capture medium and long term growth beyond the Covid-19 pandemic”.
He reiterated that the company will continue to explore other ways to further strengthen its liquidity if needed.
The US bond issue brings $ 13.3 billion in additional liquidity that SIA has raised since the start of fiscal year 2020/2021.
This includes $ 8.8 billion from a rights issue, $ 2 billion in secured financing, $ 850 million through a recent convertible bond issue, an additional $ 500 million from a private placement of new 10-year bonds over $ 500 million through new committed lines of credit and a short-term unsecured loan.
Including new lines of credit, SIA will continue to have access to more than $ 2.1 billion in committed lines of credit, the flagship carrier added. He also retained the option, until July 2021, to raise up to $ 6.2 billion in additional mandatory convertible bonds for more liquidity if needed.
Airlines are hoping travel will resume later this year, as countries roll out their Covid-19 vaccination programs.
SIA is the first major airline in Asia to tap global debt markets in 2021, following a wave of deals in the second half of 2020, Reuters reported.
There were 19 deals worth US $ 17.62 billion during that period, the largest of which was a US $ 6 billion issue from Delta Air Lines in September, Reuters added.
Global airlines are also expected to refinance at least $ 14.9 billion in bonds that will mature in 2021, while $ 23.1 billion in syndicated loans will mature this year, Reuters said.
Citigroup was the sole global coordinator of SIA’s US dollar bond issue. Citigroup, HSBC and BofA Securities were the associated bookkeepers.
